cover converted - Talaat Moustafa Group Holding Company (TMGH)

Table of Contents 

Letter from the Management . . . . . . . . . . . . . . . . . . . . . 4 

TMG at a Glance . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 

2007 Calendar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 

Shareholders’ Review: . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 

Board of Directors 

Disclosure & Shareholder Information 

Corporate Governance 

2 - 3 

About TMG: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 

History and Evolution of TMG 

The TMG Brand Name 

Awards & Recognition 

TMG Group Structure 

Real Estate Review: . . . . . . . . . . . . . . . . . . . . . . . . . . 26 

Market Overview 

TMG, a Market Leader

Current Projects 

Completed Projects 

Hotels & Resorts Review: . . . . . . . . . . . . . . . . . . . . . . . 52 


TMG’s Hotel and Resort Complexes 

Operating Hotels 

Future Developments 

International Expansion Strategy . . . . . . . . . . . . . . . . . 72 

Corporate Social Responsibility . . . . . . . . . . . . . . . . . . . 73 

Executive Team . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74 

Financial Review: . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76 

CFO Report 

Proforma Financials 

Consolidated Financials 

TMG Annual Report 2007

Letter from the Management 

“Our well-built status was no fluke or stroke of luck … 

It is the fruit of hard, nonstop work” 

Dear Valued Shareholders: 

The year 2007 was definitely a very significant year in the life 

of TMG. It marked the consolidation of the various companies 

of the group operating in the real estate and tourism development 

activities under one umbrella, the “Talaat Moustafa Group 

Holding Company (TMG)”, witnessed TMG's successful share 

offering which generated unprecedented results in the Egyptian 

financial market, and recorded remarkable growth rates in sales 

volume and value as well as bottom line figures. 

Consolidating the Group's activities under one holding company 

enabled TMG to own a significant share, estimated at 30%, in 

the real estate development sector and positioned it as the 

leading Egyptian community real estate and tourism developer, 

owning some of the largest scale projects being developed by 

the private sector in the Middle East region at large. 

Furthermore, TMG clearly demonstrated the enormous credibility 

it enjoys among its peer domestic, regional and International 

market players when it undertook its private and public share 

offering in November 2007. Results of the offering of TMG 

shares revealed an outstanding interest from Arab and 

International investors, whereby the subscription to the institutional 

and International offering was covered 17 times with total bids 

of LE 65 bn, while the retail offering was covered 41.4 times, 

receiving total bids of LE 29.6 bn. 

In 2007, total real estate unit pre- sales amounted to LE 10.368 

bn compared to LE 6.2 bn in 2006, recording a significant 

growth of 67%, total proforma consolidated revenues reached 

LE 1.87 bn, while gross profit reached LE 850 mn, implying a 

gross profit margin of 45.6%, and net profit recorded LE 1.341 

bn at the end of the year. 

As we move into 2008, we do so from a position of considerable 

financial strength and confidence in our ability to grow our 

business and provide consistent, superior value to both our 

shareholders and our clients. Our strategy is clear and focused, 

built upon: 

- Maximizing return on long-term pipeline projects through the 

continued use of the flexible “phasing” business model 

4 - 5 

- Maintaining a rigorous selection process for new development 

opportunities 

- International expansion in markets similar to our current market 

- Increasing weighting of stable revenues form hotel and resort 

complexes 

- Maintaining and enhancing reputation for quality and attention 

to details 

- Exploring new financing techniques 

We have already selected the Kingdom of Saudi Arabia to be 

the first step of our International expansion strategy in the real 

estate sector, as we will carry out two projects in Riyadh and 

Jeddah. Furthermore, we will continue to evaluate additional 

opportunities for expanding our development platform 

internationally, particularly in locations where we believe to 

enjoy competitive advantages similar to those in our domestic 

market. 

We are committed towards our investors to maintain steady 

growth rates, increase profit margins, and to continue operating 

through our low-risk phasing business model, in addition to 

striving to self-finance all our projects through our pre-sales, 

whcih is reflected in increasing returns on equity and maintaining 

a sound business development scheme. 

We fully realize that we are demanding a great deal of our 

teams. That is all the more reason, we want to thank all our 

employees, on behalf of the Board of Management, for their 

hard work and dedication. Without their expertise, professionalism, 

and personal commitment we would not have been 

where we are today. We also thank you, the shareholders, for 

your trust and your support, which we will continue to do 

everything in our power to maintain. 

TMG Holding 

Management Team

“As we move into 2008, we do so from a position of considerable 

financial strength and confidence in our ability to grow our business 

and provide consistent, superior value to both our shareholders 

and our clients.” 


TMG at a Glance 

TMG at a glance 

Our Vision 

To build and operate the most exclusive 

self-sustained modern communities 

and tourism destinations in the MENA 

region to meet and exceed customer's 

aspirations for a unique lifestyle and 

create value for our customers and 

shareholders. 

Talaat Moustafa Group (TMG) is the leading community real 

estate developer in Egypt and the Middle East, drawing upon 

over 20 years of experience in the real estate development 

industry to create innovative solutions to cater for the type and 

quality of accommodation demanded by the rising middle and 

upper middle classes of the Egyptian community. TMG's vision 

is to create community developments by establishing selfsustained 

residential city and community complexes for the 

upper and middle classes. 

TMG was the first to identify the lack of integrated modern 

communities in Egypt which meet all of the lifestyle needs of 

their residents by providing facilities and services on site. We 

continue to maintain the communities which we create and 

ensure that services we provide conform with international 

standards while maintaining profitability. This has resulted in 

TMG's strong reputation with its customers for reliability and 

quality. 

6 - 7 

Our Mission 

For our Group to be the first choice for 

customers in the real estate and tourism 

development industries in the MENA 

region, as we provide them with a better 

quality of living, and provide our 

shareholders with an increasing value 

for their investments, and provide our 

employees with excellent opportunities 

for distinction and success, and 

contribute to the development and 

prosperity of our communities. 

Our flexible phasing model allows TMG to satisfy the needs of 

the middle to upper classes. Such customer satisfaction is further 

supplemented by the wide selection of residential unit designs 

and the provision of alternative financing schemes ensuring 

affordability. 

Based on comprehensive market research, TMG indentified a 

gap in the Egyptian market in Egypt for high-end hotels and a 

lack of luxury tourism facilities despite the rising investment and 

economic growth the country witnessed since the 1990s. TMG 

applied its business model for City and Community complexes 

to its Hotels and Resorts business. The combination of real estate 

and tourist product created by establishing complexes which 

are managed by world class hotel management companies 

provide a level of service that had not previously been witnessed 

in Egypt.

Our Corporate Values 

Creativity and Motivation 

Credibility and Integrity 

Customer Focus 

Teamwork 

TMG seeks to address actual demand in the Egyptian real estate 

and tourism markets by adopting a carefully managed process 

when embarking on any new project. The process includes 

conducting thorough market research to ascertain customer 

requirements, commissioning feasibility studies and employing 

leading international firms to carry out planning, design, and 

implementation. 

Our philosophy is further supported by the strong managerial 

and organisational structure we have developed. Our employees 

understand the concept of teamwork and we pay careful attention 

to the quality of our workforce by providing regular training and 

maintaining professional development programs. 


2007 Calendar 

Euromoney Conference San Stefano Opening 

AL-Rehab Open Food-Court 

Incorporation of TMG Holding 

February 2007 

Talaat Mostafa Group Holding S.A.E. 

was established on 13th of February 2007 

under the provisions of law 95 of 1992 

and its executive regulations and registered 

in Egypt under Commercial Registration 

number 187398 on 3rd of April 2007. 

The holding company has under its 

umbrella all real estate and hotel 

development activities and companies of 

the Talaat Moustafa Group. 

Euromoney Egypt Housing Real 

Estate Finance Conference 

14th of May 2007 

With Hisham Talaat Moustafa, TMG 

Chairman, being one of the premier 

participating panelists in the Real Estate 

Session, TMG participated in the 

Euromoney Egypt Housing Real Estate 

Finance Conference held in Cairo in 

May and attended by over 600 people. 

Leading public and private sector figures 

8 - 9 

discussed how far the Egyptian housing 

and housing finance markets had come 

and assessed what needs to be done to 

move the markets to the next stage. 

San Stefano Opening 

3rd of July 2007 

July 2007 witnessed the opening of the 

iconic San Stefano Grand Plaza and a 

highly treasured visit by H.E. President 

Hosny Mubarak honoring the monumental 

project. Edging the Mediterranean 

in a setting of legendary glamour, 

the opening of San Stefano gave a 

chance to discover an intimate enclave 

within the stately Grand Plaza shopping 

and residential complex, as well as 

classically elegant accommodations, 

European spa treatments and terraced 

restaurants with fresh sea breezes. 

Opening of AL-Rehab Open 

Food-Court 

Summer 2007 

Summer 2007 witnessed the opening 

of a new open food area in AL Rehab 

city on an area of 29,000 sqm 

surrounded by a marvelous green area 

allowing Al Rehab residents and visitors 

to enjoy a variety of international and 

local cuisines of renowned chains such 

as Mercato Italiano, Los Getsos, 

Arabiata, Quick 24, le Revé, Hardee's, 

Tekka, KFC, Pizza Hut, Cinnabon, Costa 

café, and El Shabrawy. 

AL-Rehab Mall 2 Opening 

August 2007 

Rehab Mall 2, the largest shopping mall 

in Al-Rehab city and one of the largest 

in New Cairo, opened in August 2007 

to serve as an attraction to all New Cairo 

residence. With an array of national and 

international brand names and a variety 

of products and entertainment facilities 

all in one place, Rehab Mall 2 provides 

shoppers with all their needs and makes 

their shopping experience an easy and 

pleasurable one. The mall also organizes 

different events throughout the year;

AL-Rehab Mall 2 Opening 

from Kids’ fun days to free giveaways 

to reputable bands playing live at the 

mall premises. This is in addition to the 

amusing Fun City in-house entertainment 

park and the different restaurants 

available at the mall. 

TMG Corporate Restructuring 

Completed 

October 2007 

In June 2007, TMG initiated a corporate 

restructuring using a share swap mechanism 

in order to consolidate the real 

estate and hotel development activities 

of the Talaat Moustafa group companies 

under TMG Holding as the holding 

company of the group. The restructuring 

was completed in October 2007. 

TMG Holding’s Successful Share 

Offering 

November 2007 

TMG clearly demonstrated the massive 

credibility it enjoys among its peer 

TMG's Shares Publicly Traded 

domestic, regional, and international 

markets, when it undertook a retail 

offering and an institutional and 

international offering of 395 mn shares 

for subscription in TMG in November 

2007. The institutional and international 

offering was 17-times over-subscribed 

by global institutional investors, with an 

order book amounting to LE 65 billion, 

whereas the retail offering was oversubscribed 

by 41.4-times, with an order 

book value of LE 29.6 billion. 

TMG's shares Publicly Traded 

November 28, 2007 

TMG shares started to be traded on the 

Cairo and Alexandria Stock Exchange 

(CASE). 

2nd Cairo Investment Forum 

9th & 10th December 2007 

Following up on its participation in the 

first forum in December 2006, TMG took 

part in the Second Cairo Investment Fo- 

2nd Cairo Investment Forum 

rum held under the Patronage of H.E. 

President Hosny Mubarak, the Ministry 

of Investment, and the General Authority 

for Investment & Free Zones (GAFI), and 

organized by Al-Iktissad Wal-Aamal 

Group. The event highlighted the growing 

interest of the Arab and International 

business community in the 

process of change underway in the Egyptian 

economy, its strong growth, and the 

increasing number and range of 

investment opportunities in it. The participation 

of Mr. Hisham Talaat Moustafa 

in the Real Estate Developers' Session 

spotlighted the importance of publicprivate 

partnerships and the role of 

foreign direct investments to achieve 

sustainable economic development 

through linkages opportunities. 


Shareholders’ Review



Corporate Governance


Hisham Talaat Moustafa 

12-13 

Chairman 

He is the Chairman of TMG 

Holding Co. announced in 

November 2007. Prior to 

that he was also Chairman 

and CEO of each of the 

operating companies in the 

real estate and tourism development 

sectors in the Group. He is also a member 

of the Egyptian Shura Council (parliament), and the 

Deputy Chairman of the Economic Committee thereof, 

as he was unanimously elected on May 5th, 2004 by 

the first district in Alexandria. Mr. Moustafa was born in 

Alexandria in 1959, and is the youngest son of Eng. 

Talaat Moustafa, the founder of the Talaat Moustafa 

Group. He received a Bachelor of Commerce, Accounting 

Section, from Alexandria University in 1980. Mr. 

Moustafa combines practical experience with academic 

knowledge, and has attended several specialized advanced 

professional training courses in his field. 

Tarek Talaat Moustafa 

Non-Executive Member 

He is the Chairman and 

Managing Director of Alexandria 

Construction Company, 

one of the largest contractors 

in the MENA Region. He is 

also the Executive Chairman 

of other companies as Alexandria 

for Electrical Works, Alexandria for Glass Manufacturing, 

Alexandria for Tunnels, and Alexandria for 

Construction and Decoration, in addition to being a board 

member of a number of the real estate development 

companies in the group. He is an elected member of the 

Egyptian Parliament and chairs its Housing and Infrastructure 

Committee, a member of the National Democratic Party, 

the Board of the Egyptian Construction Contractors Union, 

and the National Union of the Chambers of Commerce, 

as well as being the founder of the Youth Association of 

Sidi Gaber. He received a Bachelor's degree in Civil 

Engineering from Alexandria University in 1975. 

Yehia Mohammed 

Awad Bin Laden 


He is also a director of Arab 

Cement Company Limited, 

Teba Company for Investment 

and Real Estate Developments, 

White Cement 

Company, Al-Azezeya for 

Investment and Real Estate 

Developments, Jeddah Holding Company for Developments 

and Orax Company, all of which are companies 

controlled by the Bin Laden family. He received a 

Bachelor's degree in Industrial Engineering from Northeastern 

University, Boston, Massachusetts. 

Mahmoud Mohamed 

Mahmoud 

Non-Executive & Indpendent 

Member 

He is also a consultant to 

TMG. He was a board 

member of The Egyptian 

Central Bank from 2000 to 

2003, a board member of 

the Egyptian Highest Council 

of Exportation in 1999, Highest Council of Investment 

in 1998, Holding Company for Tourism in 1992, and 

the Public Authority for Tourism Developments in 1992. 

He was also the chairman of Egypt Export Development 

Bank from 1996 to 2003, the minister of Economics 

and Foreign Trade from 1993 to 1996, the Chairman 

of Banque Misr from 1987 to 1990, the head of 

Federation of Egyptian Banks from 1988 to 1990, and 

a member of Shura Council between 1992 and 1998. 

He received both a Bachelor's degree in Commerce 

and a Post-graduate Diploma in Tax Accounting from 

Cairo University in 1951.

Omar Mohamed 

Bin Laden 


He has also been the 

Chairman of the Real Estate 

Group since 2002, and prior 

to that time was a director 

and Chief Executive Officer 

of Asia Pacific and a General 

Manager for the Contracting 

Division of the Bin ladin Company, which is a company 

controlled by the Bin Laden family. He received a 

Bachelor's degree in Civil Engineering from the University 

of Miami in 1974. 

Hany Sarie El Din 


Member 

He has been a Professor of 

Law at Cairo University since 

2001. He was Chairman of 

the Egyptian Capital Markets 

authority for two years ending 

in June 2007. Prior to that, 

he was a practicing lawyer. He received a Bachelor's 

degree in Law from Cairo University in 1995, and a 

Doctorate in Law from Queen Mary College, London 

in 1999. 

Mohamed Hesham El Sherief 

Shareholders’ Review 


Member 

He has been a professor of 

Management Administration 

at the American University in 

Cairo since 1985. He was 

also the Deputy President at 

The American University in 

Cairo from 1991 to 1994. He received a Bachelor's 

degree in Military Science and Engineering from the 

Egyptian Military Technical College in 1975, a Masters 

degree in Computers and Automatic Control from Alexandria 

University in 1978, and a Doctorate in Administration 

and Engineering from Massachusetts Institute of 

Technology in 1982. 

Hany Talaat Moustafa 


He is also Chairman of 

Alexandria Agricultural 

Company and certain other 

companies operating in the 

agricultural sector in which 

the Talaat Moustafa family 

has significant holdings since 

2002. Prior to that time, he was an engineer from 1978 

to 1981, a board member from 1981 to 1982 and 

the Managing Director from 1982 to 2002 of Alexandria 

Agricultural Company. He is also a member of the 

boards of various companies operating in the real estate 

and construction sectors in which the Talaat Moustafa 

family has significant holdings. He received a Bachelor's 

degree in Civil Engineering from the University of 

Alexandria in 1978. 


Board of Directors Continued 

Ali Abdallah Ali 

14-15 

Executive Member 

He has been a Vice President 

for Investments of one of the 

Operating Companies since 

2000. Prior to that time he 

was a Vice President of Faisal 

Bank focusing on real estate 

financing. He received a Bachelor of Commerce degree 

from the University of Cairo in 1961. 

Hossam El Din Mohamed 

Abdallah Helal 


Member 

He is also the Managing and 

International Practice Partner 

for Grant Thornton Mohamed 

Hilal, an accounting firm. He 

has worked for this firm and its predecessors and related 

firms since 1975. He received his Bachelor of Commerce 

degree from the University of Cairo in 1975. 

Maoud Hassanein 

El Habashi 


He is the Chairman and Managing 

Director of Misr Insurance 

Company. He is also 

a board member of the 

Faculty of Commerce of 

Cairo University, the Central 

Egyptian Bank, and Egyptian-Gulf Bank. He received 

a Bachelor of Commerce degree in 1964, a Masters 

degree in Commerce in 1972, and a Doctorate in 

Philosophy in 1977, all from Cairo University.


Share Information 

Issued & paid-in Capital LE 20.302 bn 

Number of Shares 2,030.2 mn shares at a par value of LE 10/share 

Free Float 25 % 

Market Capitalization (as at December 31st 2007) LE 25 bn 

Listing Cairo & Alexandria Stock Exchanges 

Reuters Code TMGH.CA 

25.00% 

27.15% 

TMG RE & Tourism Investment 

47.85% 

Other incl.Free Float Strategic Shareholders 

TMG Offering: 

TMG offered 395 mn shares through a retail and an institutional 

and international offering at a ratio of 16.5% and 83.5%, 

respectively. The institutional and international offering took 

place over two tranches at a price of LE 11.6/share; the primary 

tranche amounted to 215 mn shares, while the secondary 

tranche amounted to 115 mn shares. The retail offering, 

amounting to 65 mn shares, was executed at a price of LE 

11/share, a 5% discount from the institutional and international 

offering price. Results of the offerings revealed an outstanding 

interest from Arab and international investors, whereby the 

subscription to the institutional and international offering was 

covered 17x with total bids of LE 65 bn, the retail offering was 

covered 41.4x, receiving total bids of LE 29.6 bn. 

TMG's shares started to be traded on CASE on November 28, 

2007. 

Share Capital 

As a result of the offering, the Company's issued and paid up 

capital amounted to LE 20,302,035,500 divided over 

2,030,203,550 shares at a par value of LE 10 per share as at 

December 31, 2007. 

Shareholding Structure 

TMG RE & Tourism Investment (including Talaat Moustafa family 

and the Saudi group, the most renowned of which is the Bin 

Laden of Saudi) hold 47.85% of TMGH's shares, strategic 

shareholders hold 27.15%, and 25% is other shareholders 

including public free float. 

Shareholding Structure 

15% 

2% 

5% 

2%1% 

4% 


Dividend Policy 

As a Holding Company, TMG’s ability to pay dividends depends 

on the dividends it receives from its subsidiaries and affiliates. 

The Company was incorporated in April 2007 and was not yet 

due to pay any dividends as at the end of fiscal year 2007. Its 

first full year consolidated results will be at the end of fiscal year 

2008. As with its individual subsidiaries, TMG Holding will 

follow a policy of paying dividends whenever permitted by its 

results of operations, financial position, investment and liquidity 

requirements, legal reserves, and minimum capital requirements. 

Disclosure 

To ensure full disclosure and transparency, TMG reports its 

consolidated financials on quarterly basis following the Egyptian 

Accounting Standards (EAS). These are posted on the company 

website (www.tmgholding.com) along with all relevant company 

news and updates. 

3% 

68% 

Egypt UK KSA UAE 

Norway Europe Others 

USA 


Corporate Governance 

TMG is committed to achieving and maintaining the highest standards of corporate 

governance. The key corporate governance practices include: 

The Board of Directors 

TMG’s 11-member board of directors includes 4 independent 

and non-executive directors, all of whom are re-nowned public 

and professional figures: 

Mahmoud Mohamed Mahmoud 

Consultant & Former Board Member of Egyptian Central Bank 

Mohamed Hesham El Sherief 

Professor of Management at the American University in Cairo 

(AUC) 

Hany Sarie El Din 

Professor of Law at Cairo University & Former Chairman of 

Egyptian Capital Market Authority (CMA) 

Hossam El Din Abdallah Helal 

Managing Partner for Grant Thornton 

Board Committees 

The Board of Directors also has two independent committees, 

the Audit Committee and the Nomination and Remuneration 

Committee, both of which are composed of and chaired by 

non-executive directors. The duties and responsibilities of the 

two committees are in line with the Egyptian Capital Market 

Authority (CMA) regulations as well as the U.K. standards as 

based on the recommendations of Nester, the renowned UKbased 

consultancy firm. 

16-17 

Audit Committee 

As required by CASE Listing Regulations, the Company has an 

Audit Committee composed of three non-executive directors. 

The Audit Committee is accountable to the Board of the Company 

and not to executive management of the Company. 

The primary functions delegated by the Board to the Audit 

Committee are to assist the Board of Directors in fulfilling 

its oversight responsibilities through: 

inspection and review of the internal audit procedures of the 

company. 

inspection and review of the accounting standards applied 

in the company and any changes resulting from the application 

of new accounting standards; 

inspection and review of the internal audit procedures, plans 

and results; 

inspection and review of the periodic administrative information 

that is presented to the different levels of management and 

the methods of such preparation and timing of submission; 

inspection of the procedures that are followed in the preparation 

and review of the following: 

(a) the periodic and annual financial statements; 

(b) the public or private placement circulars for offerings of 

securities; 

(c) the estimated budgets, including the estimated cash flows 

and income statements; 

ensuring the implementation of appropriate audit procedures 

in order to protect the assets of the company and undertaking 

periodic evaluations of these procedures to ensure conformity 

by the company with applicable accounting and audit rules 

and preparing a report,on a periodical basis, on the adequacy 

of those procedures.

The Audit Committee must ensure that the company’s management 

is following the recommendations of the company’s auditor 

and the CMA; and any other functions that the Board 

may deem necessary for the benefit of the company. 

The Board of Directors is required to adopt the Audit Committee’s 

recommendations within 15 days of receiving notice of such 

recommendations. If the Board does not follow the 

recommendations, the chairman of the Audit Committee must 

notify both the CMA and CASE. 

Chairman: Hossam El Din Abdallah Helal 

Members: Mohamed Hesham El Sherief and Mahmoud 

Mohamed Mahmoud 

Nomination and Remuneration Committee 

On 28 October 2007, the Board of Directors of the Company 

approved a set of principles in order to promote sound corporate 

governance (the “Corporate Governance Principles”). Pursuant 

to the Corporate Governance Principles, the Company has 

established, in addition to the required Audit Committee, a 

Nomination and Remuneration Committee, which is required 

to comprise no fewer than three members, at least two of whom 

must be non-executive directors of the Company. The Nomination 

and Remuneration Committee is accountable to the Board of 

the Company and not to executive management of the Company. 


The primary functions of the Nomination and Remuneration 

Committee are to: 

make recommendations regarding board membership 

nominations by the Board of Directors to the shareholders’ 

meeting; 

perform periodic and ongoing reviews of whether the Directors 

have the requisite skills for the performance of their functions; 

evaluate the composition of the Board of Directors and make 

recommendations to the Board of Directors regarding the 

same for the Board of Directors to consider in proposals to 

the shareholders’ meeting; 

ensuring on regular basis, the independence of non-executive 

members and the absence of conflicts of interest in cases 

where the member is also a member of the board of another 

company; 

make recommendations of clear policies for the remuneration 

of Directors and executive management and referring to 

those standards regarding their performance in assessing 

such remuneration; 

make recommendations regarding compensation for Directors 

and executive management. 

Chairman: Hany Sarie El Din 

Members: Hossam El Din Abdallah Helal and Mahmoud 

Mohamed Mahmoud 


About TMG




TMG Group Structure


The Talaat Moustafa Group developed its business with a focus on quality, timely delivery, and 

adherence to precise specifications. 

Origins since the seventies 

In the early seventies, Eng. Talaat Moustafa founded his company 

and entered the business in Egypt. The Talaat Moustafa family 

developed its business with a focus on quality, timely delivery, 

and adherence to precise specifications. 

Opportunities in real estate development 

In the mid 1980s, Mr. Hisham Talaat Moustafa began eying 

entering into large scale real estate development projects, having 

identified an opportunity arising out of a government-sponsored 

development programme commenced in 1983 to counteract 

the housing shortage in Egypt and to improve the quality of life 

for its citizens. As part of this programme, the government 

allowed development by the private sector and promoted the 

development of a series of nine new satellite cities in the 

undeveloped desert areas around Cairo, to be linked together 

by a ring road. 

Development of Al Rawda Al Khadra 

In 1987, real-estate activities started with the inauguration of 

Al Rawda Al Khadra Village, over an area of 84,000 sqm, in 

Abu Youssef in Alexandria. The project was sold out in 1990. 

Establishment of Alexandria Real-Estate Investment 

In January 1988, AREI was established as the Talaat Mostafa 

Group (TMG)'s real-estate development arm operating under 

Law No. 159/1981. AREI's first project, "Virgenia Beach Village", 

which extends over 365,4000 sqm on the Northern Coast, 

gained good reputation and was sold out in 1995. 

High presence into community development 

TMG saw an opportunity to expand this model by developing 

similar complexes as part of the satellite cities on the outskirts 

of Cairo. TMG submitted two successful proposals to develop 

portions of this land and in 1994 commenced sales for residential 

units in its May Fair and Al Rabwa I city and community complexes 

in Al Shorouk, East of Cairo and Al Sheikh Zayed, West of Cairo 

respectively. Substantially all of the residential units in these 

complexes were fully delivered by 2004. 

1987 88 89 90 91 92 93 94 95 96 97 

Al Rawda Al Khadra 

20-21 

May Fair 

Al Rabwa I 

Four Seasons Sharm El Sheikh 

Four Seasons Nile Plaza 

1997-2011: Al Rehab I 

Virgenia Beach

Building upon its success 

TMG bid to develop even larger areas of land on the outskirts 

of Cairo and in 1996 began to develop the first phase of the 

company's flagship Al Rehab I in New Cairo, the first fullyintegrated 

city and community complex in Egypt. Due to the 

high demand for properties in the area of Al Rehab I, TMG 

commenced sales in the extension of this community, known as 

Rehab II in 2006, and construction is estimated to be completed 

in 2017. During the same year, TMG also launched Al RabwaII. 

The largest all-inclusive enclosed city in the Middle East 

In July 2006, the group started the project of “Madinaty”, over 

33.6 mn sqm, ranking it as the largest all-inclusive enclosed 

city in the Middle East. The project is expected to be completed 

in 2020. 

Filling the gap in luxury hotels in Egypt 

In 1995 and 1996, TMG, wishing to build upon its development 

expertise and to diversify its operations, identified a gap in the 

luxury hotel market in Egypt, and acquired land on which to 

construct Four Seasons Resort Sharm El Sheikh and Four Seasons 

Hotel Cairo at Nile Plaza, which were opened in 2002 and 

2004, respectively. In July 2007, TMG opened its third Four 

Seasons Hotel, the Four Seasons Hotel Alexandria at San Stefano. 

More to come 

Building on its longstanding success and experience in the 

Egyptian market, TMG is currently tapping into new markets on 

both the community real estate development and the hotels and 

resorts front, including a joint venture in Saudi Arabia, as well 

as expansion opportunities in the Gulf and Eastern Europe 

regions, in addition to its expansions in Egypt with new hotel & 

resorts projects, such as Marsa Alam, Luxor, and much more 

to come. 

98 99 2000 01 02 03 04 05 06 07 08 

2006-2017: Al Rehab II 

San Stefano Complex 2006-2020: Madinaty 

2009: Opening of Nile Hotel 

About TMG 

2006-2012: Al Rabwa II 



TMG was founded, several decades ago, on the firm belief in quality, value, 

and exceeding customers’ expectations. 

Well-recognised brand name associated with quality 

and reliability 

Over more than 20 years of operations, TMG has developed 

a solid reputation and strong brand recognition amongst 

prospective purchasers in the Egyptian market and in the MENA 

region. The strength of TMG’s brand enables it to consistently 

pre-sell the residential units in each of its projects in advance 

of construction, attract major commercial and retail tenants, 

procure sites for further development projects, and secure 

arrangements for financing with leading local banks. 

22-23 

A Strategy to maintain and enhance 

reputation for quality and attention to detail 

In an effort to provide high quality end-products and meet the 

actual demand of real estate and tourism markets in Egypt, 

TMG follows a carefully managed process including conducting 

a thorough market research to ascertain customer requirements, 

commissioning feasibility studies, and employing leading 

international firms to carry out planning, design and implementation. 

Furthermore, TMG endeavours to maintain full control over the 

management of each of its city and community complexes, from 

inception of the project, through development, construction and 

post-construction. This ensures the quality of its output and 

enables it to conform to the heighest standards and specifications. 

TMG believes that retaining control over management of its 

properties following the completion of construction enables it 

to maintain the quality of its complexes on a long-term basis, 

thus helping to maintain the resale value of the residential units. 

It also provides a strong selling point for additional phases in 

the same development and for other TMG city and community 

complexes. Once construction is completed, TMG retains control 

of maintenance, repairs, staffing, security, and other services in 

the common areas of its city and community complexes on 

behalf of its residents, on a cost-neutral basis.


Growing Leadership in Awards, Year After Year 

Conde Nast Gold List 2007 

Best Hotel in Africa and the Middle East. 

Robb Report Luxury Hotels Special Annual Issue 2006 

Editor's Top Choice in Cairo 

Conde Nast Traveler Reader's Choice Awards, 2006 

Number 1 Hotel in Africa 

Gallivanter’s Guide (UK), 2005 

Top 5 “Best Resort Europe/Middle East and Africa” 

“Best Hotel for Children” 

Condé Nast Traveller (UK), 2005 

Top 20 “Best Overseas Leisure Hotel, Middle East, Africa and Indian 

Ocean” 

Tatler (UK), 2005 

“Egypt Hottest New Riviera Resort” 

Zagat International Travel Survey, (US), 2005 

Top 5 “Best 50 Resorts Worldwide” 

World Travel Awards (UK), 2005 

“Egypt’s Leading Spa Resort” 

Condé Nast Traveller (UK), 2004 

Readers’ Award 

“African, Indian Ocean and Middle East” 

Zagat International Travel Survey (US), 2004 

“Best Dining Experience in the Middle East” 

Top 10 “Best Worldwide Resorts” 

Gallivanter’s Guide Readers Awards (UK), 2003 

Runner-up of “Best Resort in Europe, Africa and the Middle 

East” 

Runner-up of “Best New Hotel/Resort Discovery” 


Amongst Top Ranked ‘Best for Adventure’ 

Condé Nast Traveller’s Hot List, (2003) 

Top 50 “World's Most Luxurious and Stylish Hotels” 

Gallivanter’s Guide (UK), 2002 

“Hotel of the Year” 

Runner up of “Best Resort in Europe/Africa/Middle East” 

Gallivanter’s Readers’ Poll (UK), 2002 

“Best New Hotel/Resort Discovery” 


“Runner Up to the "Hotel of the Year and Seaside” 

About TMG 


TMG Group Structure 

Al Rehab I 

May Fair 

Al Rabwa 

I & II 

San Stefano 

Complex* 

100% 

100% 

100% 

100% 100% 100% 50% 

*TMG Group Structure in July 31 st , 2008. 

**ICON holds only the asset of the hotel, which does not include the residential units or the commercial property. 

These components of the complex are held by San Stefano Real Estate SAE 

In June 2007, TMG initiated a corporate restructuring using a 

share swap mechanism in order to consolidate the real estate 

and hotel development activities of the Talaat Moustafa group 

companies under TMG Holding as the holding company of the 

group. In order to carry out the restructuring, TMG appointed 

an independent fair-value auditor to assess the fair market value 

of each of Arab Co. for Urban Dev & Projects SAE, Alexandria 

Real Estate SAE, San Stefano Real Estate SAE, and Alexandria 

Co.for Urban Development SAE as part of the swap process. 

The value of each of the companies was approved by their 

respective boards of directors and shareholders. 

For Alexandria Real Estate SAE and San Stefano Real Estate 

SAE, a tender offer was undertaken in August 2007 that offered 

minority shareholders the option to swap their shares in those 

companies for shares of TMG Holding, to accept a cash offer 

at the same swap value, or to remain as shareholders of those 

companies when they became subsidiaries of TMG Holding. 

The restructuring was completed in October 2007 and resulted 

in TMG Holding’s direct and indirect ownership in Arab Co. for 

Urban Dev & Projects SAE, San Stefano Real Estate SAE, and 

Alexandria Real Estate SAE being increased, through a series 

24-25 

Al Rehab II Madinaty Areez 

Talaat Moustafa 

Group Holding 

Company 

Direct & Indirect holding 

Alexandria Co. for 

Urban Dev SAE 


98.6% 

Alexandria Real 

Estate SAE 


100% 

San Stefano Real 

Estate SAE 


99.9% 

Arab Co. for Urban 

Dev & Projects SAE 

of transactions, to 99.9 %, 100 %, and 98.6 % of the issued 

and outstanding shares, respectively, and its ownership in 

Alexandria Co. for Urban Development SAE being increased to 

100 % of the issued and outstanding shares, which is comprised 

of a 40 % direct interest and a 60 % interest held by Alexandria 

Real Estate SAE. 

The restructuring formalises the unified management structure 

under which TMG has been operating, whereby functions 

including finance, accounting and audit, land acquisition and 

business development, design and project management, asset 

management, and human resources are carried out, and 

corporate policies and strategy, objectives, and operating 

parameters are set on a centralised basis. 

TMG’s interests in and assets of its hotel and resort complexes are 

held through ICON. The Company holds its interest in ICON 

through various subsidiaries. Following the restructuring, TMG 

Holding’s indirect holding in ICON is 81.31 %, which is held 

through the 61.62 %, 9.38 % and 10.31 % interests held by 

Alexandria Real Estate SAE, San Stefano Real Estate SAE, and 

Alexandria Co. for Urban Development SAE, respectively. 

100%

10.31% 

61.62% 

9.38% 

Indirect holding 

of 81.31% 

Arab Co. for Hotels & 

Tourism Inv. (”ICON”) 

Four Seasons 

Nile Plaza 

56% 58% 100% 84.47% 

Four Seasons 

Sharm El Sheikh 

Nile Hotel 

TMG Holding has the following companies under its umbrella: 

Arab Company for Projects and Urban Development, 

which owns and manages: 

AL-Rehab and Madinaty projects in New Cairo District 

Alexandria Real Estate Investment Company, 


AL-Rabwa Compound in EL-Sheikh Zayed City 

San Stefano Real Estate Investment Company, 


San Stefano Complex 

Alexandria Company for Urban Projects, 


May Fair Project in AL-Shorouk City 

San Stefano 

Grand Plaza** 

Arab Company for Hotels and Tourism Investments, 

which owns controlling stakes in: 

Four Seasons Nile Plaza in Garden City 

Four Seasons Resort Sharm EL-Sheikh 

Four Seasons Alexandria at San Stefano 

Nile Hotel in Cairo 

99.9% 

Marsa Alam 

About TMG 


Real Estate Review


TMG, a Market Leader 


Madinaty 

Al Rehab 

Al Rabwa 

Nassamat Al Rehab 


May Fair 

Al Rawda Al Khadra Village 

Virgenia Beach


A Combination of demographic, economic, and legislative 

factors have led to a growing Real Estate sector in Egypt 

Egypt Real Estate Sector 

Three years of entrenched reforms have resulted in a period of 

intense economic development in Egypt, one of its direct effects 

being an upsurge in property demand. 

In addition to what the government has managed to attract in 

the past few years, there is still a great potential for investment, 

driven by Egypt's economic growth rate of 7% or more, which 

includes growth in the construction sector of more than 15% 

on average each year. 

Land as well as real estate prices have been appreciating 

significantly, particularly during the past two years. Egypt's real 

estate sector is set to be further boosted by increasing income 

levels in Egypt which have given rise to a growing middle, upper 

middle and upper class, the target demographic for TMG's 

residential properties. 

Changing Egyptian demographic 

creating high demand for quality and affordable housing 

Egypt's population is young and growing, with 45 million people 

between the ages of 15 and 60 and 31.8% of the population 

under 15, according to the 2006 Population Census. Egypt is 

also experiencing rising education levels and rapid urbanisation, 

and the population of Cairo has increased dramatically in recent 

decades. These factors, together with the expansion of the 

Egyptian economy and the lack of quality residential 

accommodation in Central Cairo, contribute to the increasing 

demand for quality housing in close proximity to Cairo. 

Middle class housing 

fuels future demand 

As most of the new real-estate developments were directed 

towards Egypt's wealthy segment, the middle class accommodation 

requirements largely remain unserved. TMG was the first to 

realize the huge unmet demand in the middle class housing 

segment and to offer new customized real-estate solutions to 

tap on this demand. 

28-29 

Mortgage finance in Egypt 

The mortgage-lending sector envisaged in the Real-Estate 

Finance Law No. 148/2001 started to take shape by the end 

of 2003; and although the full effect of the mortgage system 

may not have been felt shortly, serious steps have been taken 

to speed growth in the mortgage market. 

In January 2005, the Government of Egypt launched a 20-year 

bond issue worth LE 1-bn to provide the necessary financing 

framework for the mortgage market. Meanwhile, the MFA has 

lowered the grace periods for mortgage default from three 

months to one month to allow mortgage lenders faster 

repossession procedures. In addition, mortgage borrowers have 

been granted the right to sell their mortgages or make other 

use of their properties. Also in 2006, the cost of registering land 

and property was reduced to a maximum of LE 2,000. 

Until March 2007, total outstanding mortgage loans in Egypt 

recorded LE 1 bn, with a maximum of LE 5 mn for the same 

residential unit. With mortgage loans constituting a minimal 

0.2% share of the country's GDP in FY05/06, in comparison 

to 69% in the US and 11% in Mexico, the mortgage lending 

market remains an unclaimed expedition with ample potential. 

The creation of a wealthy middle class with increasing access 

to mortgage loans have created unprecedented demand for 

real estate in Egypt, that is expected to continue in the foreseen 

future."

Real Estate Review 

“TMG was the first to realize the huge unmet demand in the 

middle class housing segment and to offer new customized 

real-estate solutions to tap on this demand.” 



The Cairo real estate market 

New Cairo and Sixth of October Cities, on Cairo's outskirts, are 

the two main areas of residential real estate expansion. 

New Cairo: 

This city lies East of modern Cairo, to the East of the ring road, 

to the South of the Cairo-Suez road and to the North of the 

Cairo-Ain-Sokhna road. According to the New Urban 

Communities Authority (NUCA), the city has 175 square kilometres 

of residential area (including low-cost, medium, above-medium, 

and luxury housing), 84 square kilometers of service areas 

(educational, health, cultural, religious, recreational, and 

commercial), and five square kilometers of industrial area. 

Approximately 87,000 residential property units have been 

developed in New Cairo, 38% by the government and the 

remainder by the private sector. Once fully developed, the city 

is expected to house two million inhabitants. 

Sixth of October City: 

This city lies 32 kilometers West of downtown Cairo, to which 

it is connected via the 26 th of July Corridor. The city has a total 

residential area of 165 square kilometers, a services area of 

116 square kilometers and an industrial area of 38 square 

30-31 

Al Rehab 

kilometers. An estimated 247,000 residential units have been 

developed in Sixth of October, of which around 22% were built 

by the government and the rest by the private sector. Once fully 

developed, the city is expected to house around 3 million 

inhabitants. 

A new housing convention 

The emergence of a new dwelling culture in Egypt has fuelled 

demand for new life-style self-sustained residential communities 

with leisure, spa, and sport facilities at the outskirts of Cairo. 

These large-scale developments combine upscale community 

living with value for money to suit a wide base of potential 

homeowners. Capitalizing on this new housing convention, 

TMG's community projects May Fair, Al Rabwa I & II, Al Rehab 

City, and Madinaty encompass the entire range of lifestyle 

features including, fitness, leisure, and entertainment facilities.

“The emergence of a new dwelling culture in 

Egypt has fuelled demand for new life-style 

self-sustained residential communities with 

leisure, spa, and sport facilities.” 


Al Rabwa Mayfair 


TMG, a Market Leader 

TMG is the leading Egyptian community real estate developer 

in terms of sales, with a market share estimated at 30% of the 

residential housing projects market. With a track record of over 

20 years in the housing and real-estate development industry, 

having developed 8.5 million sqm of land so far, TMG's vision 

is "community development" through establishing self-sustained 

residential city and community complexes for the upper and 

middle classes. 

Ownership rights to one of the largest land banks in 

Egypt 

TMG holds rights to approximately 42 million square metres in 

Egypt, representing the largest land bank held by any one 

developer in Egypt. As prices for comparable plots of land have 

risen significantly in recent years, TMG's large land bank, 

acquired at historic, fixed land prices, gives it an advantage 

over other real estate developers that must buy land at current 

market prices. 

City & community complexes 

TMG has completed the development of three city and community 

complexes, and has an additional seven city and community 

complexes either under construction or in the early stages of 

development. The latter group includes the biggest all-inclusive 

enclosed city in the Middle East, the 33.6 million sqm project 

known as “Madinaty”, “my city” in Arabic. 

32-33 

Madinaty Commercial Center 

TMG's city and community complexes provide an “alternative 

living experience” from the crowded city centre of Cairo offering 

residential villas and apartments set in a surrounding of greenery, 

well-maintained streets, and sidewalks and equipped with all 

the necessary infrastructure, such as water, electrical utilities, 

landscaping, maintenance of public areas, waste and water 

treatment, and security services. 

TMG's larger-scale city and community complexes also include 

amenities such as educational, healthcare, retail, commercial, 

recreational and maintenance facilities, commercial office space, 

and public bus systems connected to Central Cairo. 

TMG oversees the design, development, and project management 

of its city and community complexes, handles sales and marketing 

of the properties, and retains management of the day-to-day 

operations of common areas and infrastructure post-construction 

and delivery. TMG manages to start the construction of its city 

and community complexes by building in phases and, with 

limited exceptions, each cluster of buildings in any phase is fully 

sold before construction commences. This model provides TMG 

with flexibility to adjust or modify its designs and offerings based 

on changing consumer trends and tastes monitored by the sales 

teams during the selling of each phase.

TMG Real Estate Projects: 

Madinaty 

Al Rehab 1 

Al Rehab 2 

Al Rabwa 1 

Al Rabwa 2 

Nassamat 

Al Rehab 

Total land area (1) : 

33,600,000 m 2 

To be dev.land area (2) : 

33,600,000 m 2 

Total land area (1) 

(m1 Total land area 

) : 33,600,000 

(1) : 

6,140,400 m2 To be dev.land area (2) 

(m2 % owned 

To be ) : 33,600,000 dev.land area (2) : % owned (1) : 

924,225 m 2 


3,760,000 m 2 


3,760,000 m 2 


1,318,800 m 2 


0 m 2 


819,028 m 2 


819,028 m 2 


3,000,000 m 2 


n \ a 

To be dev.built up area (1) : 

16,068,886 m 2 

% owned (1) : 

99.9% 

To be dev.built up area (1) 

(m1 To be dev.built up area commence(4) : July 2006 EXp population 

) : 16,068,886 

Orig. 

(1) : 

24,225 m2 Commence Exp population : 

120,000 

(4) : Nov. 1996 

99.9% 


2,571,395 m 2 

% owned (1) : 

99.9% 


0 m 2 

% owned (1) : 

98.6% 


118,320 m 2 

% owned (1) : 

98.6% 


1,391,280 m 2 

% owned (1) : 

50% 

Commence (4) : July 2006 

Orig. Completion (5) : 2026 

Revised Completion : 2020 

Completion (5) 


Revised Compelion 


Commence (4) : Jul. 2006 



Commence (4) : Dec. 1994 



Commence (4) : Jan. 2006 



Commence(4) : Sep. 2008 

Orig. Completion(5) : 2011 

Revised Completion : n / a 

1-Land area procured 

2-Area of land still to be developed as per CBRE report 

3-The built up area (“BUA”) still to be developed under phasing plan as per the CBRE report 

Exp population : 

600,000 

Location : 

New Cairo 

Location : 

New Cairo 


80,000 

Location : 

New Cairo 


3,240 

Location : 

El Sheikh Zayed 


1,725 

Location : 

El Sheikh Zayed 


16,800 

Location : 

Riyadh 

Amenities : 

Various including: 

36 hole golf course 

10 schools - 1university 

8 hotels commercial 

Parks (office and retail) 

1 Hospital 

Amenities : 

4 Schools 

7 Mosques -1 Church 

1 Office Park 

2 Shopping Malls 

Amenities : 

3 Mosques 

3 Schools 

1 Shopping Malls 

1 Club house 

Amenities : 

1 Shopping mall 

Cinema 


Sports pavilion 

Amenities : 


Amenities : 

Various including: 

Medical center 

Shopping mall 

Sports club 


4-Launch of sales 

5-Delivery of final unit assumed in the CBRE report 

6-Effective Ownership 



Location Extention to New Cairo 

Total land size (m 2 ) 33,600,000 

BUA (m 2 ) 16,068,886 

Expected population 600,000 

CBRE value (LE mn) 10,778 

TMG participation 99.9% 

Commence date July 2006 

Completion date* 2026 

Revised completion date 2020 

Madinaty 

* Initial plan date 

34-35




Madinaty 

TMG is currently developing Madinaty, the largest purposebuilt, 

fully-integrated residential community development in 

Egypt. Madinaty is spread over 33.6 mn sqm with a planned 

accommodation capacity of 600,000 residents. The Madinaty 

development is planned to encompass 68,575 apartments with 

a total BUA of 10.2 mn sqm, 6,124 villas with a total BUA of 

2.8 mn sqm, 8 hotels, a university, 10 schools, 3 malls with a 

total BUA area of 238,000 sqm, a business district that includes 

an office park, a technology park, a conference center and an 

exhibition center with a total BUA of around 385,000 sqm. 

TMG is establishing Madinaty to become an independent city, 

conforming with international standards. In search for perfection, 

the company assigned three prominent American companies, 

SASAKI, HHCP, and SWA, specialized in self sustained urban 

community planning to design Madinaty according to international 

standards to cater for the social needs of the middle, uppermiddle, 

and upper classes of the society. 

Land bank 

The project is an extension to New Cairo, and its land bank is 

located approximately 35 kilometers East of Cairo on Cairo- 

Suez arterial road, with an access to the planned second ring 

road. The site lies 30 minutes away from Heliopolis and 45 

36-37 

Madinaty golf heights villas 

minutes away from Cairo. 

TMG acquired Madinaty's land bank from the Government of 

Egypt at an estimated value of LE 1.613 bn, a price that is 

considered to be very competitive given the escalating land 

prices putting TMG at a great competitive advantage vis-à-vis 

other developers and securing it a sound profit margin. Payment 

for the land is agreed to be made in kind, representing 7% of 

the residential units expected to be built, to be delivered upon 

completion of each phase. 

Master plan & development 

The project is designed to provide residents with a full-service 

independent city while maintaining a high level of privacy. This 

is achieved through locating services at the parameters outside 

the residential areas to reach maximum privacy for each residency, 

with a vertical spine containing the multi-purpose city center, 

and another horizontal spine, in which TMG will establish clubs 

and facilities, in addition to essential services such as pharmacies 

located in the spine crossing point at walking distance to provide 

easy accessibility. 

Construction of Madinaty will take place in eight phases, each 

approximately three to four years in duration, originally scheduled

Madinaty sports and social clubs 

for completion in 2026. TMG plans to construct 16.1 mn sqm 

of BUA over the project's life representing 47% of the total site 

area. Residential BUA amounts to 13 mn sqm or 81% of the 

total BUA area; of which apartments represent 64%, and villas 

make up the balance. 

Project progress 

Madinaty sales commenced in July 2006. As at December 31st 

2007, 8,545 apartments and 2,191 villas in Madinaty had 

been sold, representing approximately 12.5% of the apartments 

and 35.8% of the villas planned to be constructed. 

The completion date of the project is expected to be 6 years 

earlier than the planned date of 2026, driven by the project's 

positive perception in the market in addition to the strengthening 

Egyptian economy. 


Madinaty office parks 



Al Rehab I 

Location New Cairo 


To be dev. land (m 2 ) 924,225 




Commence date Nov-96 

Completion date* until 2011 

Revised completion date 2011 

Al Rehab I 

& 

Al Rehab II 


38-39 

Al Rehab II 

Location New Cairo 


BUA 2,571,395 




Commence date July 2006 

Completion date* until 2020 

Revised completion date 2017




Al Rehab I and II 

Al Rehab I, located in New Cairo, is the flagship of TMG's 

residential projects. Its ultimate success, as the first city and 

community complex in Egypt, has stimulated local and regional 

developers to imitate Al Rehab I's business model. Subsequently 

TMG has expanded further by establishing Al Rehab II in July 

2006 as an extension for Al Rehab I. 

Al Rehab I was launched in November 1996 targeting upper 

and upper middle income classes. Occupying approximately 

6.1 mn sqm of land and an expected population of 120,000 

inhabitants, the development is a self sustained city consisting 

of apartment buildings, villas, and a wealth of public gardens 

and richly landscaped areas. Al Rehab I includes four schools, 

medical offices, a private leisure club, a commercial centre, 

restaurants, and two retail malls. It also contains a fire station, 

security services, a public bus system, and other infrastructure. 

Al Rehab II will occupy 3.8 mn sqm of land and is expected to 

have a population of 80,000 inhabitants upon its completion. 

The project is planned to encompass 602 villas representing a 

BUA of 0.15 mn sqm, 17,823 apartments representing a BUA 

of 2.25 mn sqm, in addition to 3 mosques, 3 schools, a shopping 

mall, a retail centre, a club house, and infrastructure and amenities 

similar to Al Rehab I. 

40-41 

AL-Rehab residential buildings grardens view 

Land bank 

Al Rehab City (Al Rehab I & II) occupies a total land area of 

almost 10 mn sqm located in New Cairo on the Cairo-Suez 

Road approximately 27 kilometres East of Cairo, and has access 

to Cairo's planned new ring road. 

Al Rehab master plan & development 

The project is designed in divisions of residential areas in the 

form of clusters with different models, provided with parking 

lots. The area benefits from a cooler climate (about 5 o C below 

the temperature in Cairo). As per the project's master plan, total 

BUA will be limited to 2.57 mn sqm, or 68% of the total site 

area. 83% of the total BUA, equivalent to 2.1 mn sqm, is 

earmarked for residential units, of which apartments represent 

94%, and villas make up the balance. 


Sales of Al Rehab I started in November 1996. At the end of 

fiscal year 2007, the project was almost completed and fully sold 

except for 517 villas on a total area of 414,405 sqm and 61 

plots of land on a total area of 60,349 sqm, representing the 

projects 6 th and last phase. The final delivery of the Al Rehab I 

units is expected in 2011.

A villa with a private swimming pool 

TMG started Al Rehab II units' sales in July 2006, with the ground 

breaking phase scheduled in 2007. By the end of 2007, 1,438 

apartments and 346 villas had been sold, equivalent to a BUA 

of 345,200 sqm, representing 16% of phase I residential BUA. 

The completion date of the projects is expected to be 3 years 

earlier than the planned date of 2020. 


AL-Rehab fifth phase residential buildings 



Al Rabwa I & II 

Location El Sheikh Zayed, North 6 th October City 


To be dev. land (m 2 ) 819,028 


CBRE value (LE mn) 282 


Commence date January 2006 (Al Rabwa II) 

Completion date 2012 (5 years) 

Al Rabwa I 

& 

Al Rabwa II 


42-43




Al Rabwa I and II 

Al Rabwa I is a residential compound that was launched in 

1994 and virtually fully sold by 2005. Located in one of the 

oldest communities in Sheikh Zayed, at 140 m above sea level, 

Al Rabwa targets high-end segments providing residents with 

a clean and calm environment. Al Rabwa I spreading over a 

total land area of 1.3 mn sqm encompasses 649 villas, a 

shopping centre, and a private leisure club with a 9 hole golf 

course. 

Capitalizing on the big success of Al Rabwa I, TMG is currently 

developing an extension to it, known as Al Rabwa II. Al Rabwa 

II will occupy 0.8 mn sqm of land, and will also be comprised 

of villas. It will include a second private leisure club and an 

additional 9-hole golf course that will connect to the existing 

golf course in Al Rabwa I. 

Land bank 

Al Rabwa I & II occupy a total land bank of 2.1 mn sqm located 

West of Cairo, in Al Sheikh Zayed district, approximately 4 km 

North of 6 th October City, acquired from the government of 

Egypt at a total price of LE 154 mn to be paid over 6 years 

starting 2005. 

44-45 

One of AL-Rabwa villas with a private garage 


Al Rabwa II project was launched in January 2006 and is 

planned to follow a similar model of the already completed 

Rabwa I, consisting of 340 villas with an average BUA of 348 

sqm per villa. Another 9-hole golf course will be attached to 

the existing one. The development of the project is expected to 

be distributed among 3 phases, with phase I consisting of 172 

villas and both phase II and phase III consisting of 84 villas 

each. 


The final delivery of the Al Rabwa I units is expected in early 

2008. As at 31st December 2007, 39 % of the residential 

villas in Al Rabwa II had been sold. Construction commenced 

in early 2007, and final delivery of the Al Rabwa II units is 

expected in 2012.

A villa with a private swimming pool 

“ We provide beyond compare quality of living that 

makes all different classes of society feel better 

every time they are home.“ 


A villa terrace garden view 



Location Al Riyadh 


Residential BUA 1,391,280 

TMG participation 50% 

Sales launch date September 2008 

Completion date* 2011 

Nassamat 

Al Rehab 


46-47




Nassamat Al Rehab 

In pursuit of regional expansion and intending to replicate the 

success of its Egyptian city and community complexes in Saudi 

Arabia , TMG entered into a 50:50 joint venture with Saudi Al 

Mehedeb, Al Fawzan and Al Kahtani through their company 

"Al Oula" in January 2007. The joint venture company, Areez, 

will develop city and community complexes in each of Riyadh 

and Jeddah on a total land area of 5.9 mn sqm targeting middle 

and upper middle income classes, in which a larger portion is 

dedicated for villas to serve the average income and high 

consumer preference in Saudi Arabia for villas. 

TMG has specifically chosen KSA to be home to its first project 

to penetrate a new market outside the local market due to the 

shared similarities between the Egyptian and Saudi Arabian real 

estate markets. Additionally, the Saudi real estate sector is still 

considered in its developing phase, which creates a good 

opportunity for the new project to capitalize on the expected 

growth of this sector. 

Land bank 

Areez acquired a land bank of 3 mn sqm located in Riyadh for 

its new project Nassamat Al Rehab. 

48-49 

Distinctive architectural designs 


Nassamat Al Rehab is planned to include 3,000 apartments, 

and 2,051 villas with a total residential BUA of 1.4 mn sqm, 

one mall with a BUA area of 0.1 mn sqm, in addition to other 

amenities including schools, clubs, and a medical centre. 

The design for Nassamat Al Rehab city and community complex 

is in an advanced stage of development and sales are expected 

to commence in the last quarter of 2008.

Malls and parks Villa type A 

“ Based on our broad experience, strong track 

record, and reputable brand name, TMG has 

further leveraged its qualifications to access 

new international markets.“ 



Mayfair 

Location El Sherouk 

Size (m 2 ) 592,200 

Estimated population 1,265 

CBRE value LE mn-rental 

income only 20 

Sold out date 2005 

Mayfair 

May Fair 

The May Fair complex is primarily a residential compound consisting of 253 residential villas, as well 

as a club, a school, a nursery, and a retail mall. This complex was completed in 2005 and all of its 

residential units have been sold. It is located in El Sherouk City, an extension to New Cairo City on 

the Cairo-Suez highway, 45 kilometres East of Cairo, on a total land area of 0.6 mn sqm. 


The Al Rawda Al Khadra Village complex is a residential resort consisting of 1,150 apartments, 35 

villas and a shopping mall, swimming pools and a mosque. This complex was completed in 1990 and 

all of its residential units have been sold. It is located in Al Agami in Alexandria and occupies 

approximately 84,000 sqm of land. 

Virgenia Beach 

The Virgenia Beach complex is a resort located on the Northern Coast of Egypt, 85 kilometres from 

Alexandria on a total land area of 0.4 mn sqm. The resort encompasses 368 villas, a small shopping 

area, swimming pools, a leisure club, and a mosque. This complex was completed in 1995 and all 

of its residential units have been sold. 

50-51 


Location Al Agami, Alexandria 

Size (m 2 ) 84,000 

Estimated population 6,245 

Sold out date 1987

Virgenia Beach 

Location North Coast 

Size (m 2 ) 365,400 

Number of Villas 368 

Sold out date 1995 

Al Rawda Al Khadra Virginia Beach 

“ TMG provides an unparalleled level of 

residential communities and upscale properties.“ 


Hotels & Resorts Review


TMG’s Hotel and Resort Complexes 


Four Seasons Cairo at Nile Plaza 

Four Seasons Sharm El Sheikh Resort 

Four Seasons Alexandria at San Stefano 


Nile Hotel 

Marsa Alam


Egypt continues to be one of the most popular tourism 

destinations and a home away from home for many 

Egyptian Tourism Industry 

Egypt's tourism sector is considered amongst the most dynamic 

and influential sectors in the Egyptian economy, as it is ranked 

amongst the nation's top generators of jobs estimated to provide 

a minimum of 8% of jobs in Egypt's total workforce. Additionally, 

tourism receipts account for almost 5% of the nation's GDP, 

whilst coming in second in terms of inflow of foreign earnings 

constituting 23.4% of total receipts. During the period between 

2001 and 2004, tourism investments experienced a significant 

decline. However in 2004, investment in the industry increased 

by 18.4%, demonstrating the inelasticity of demand in the 

Egyptian tourism market. During the recent years Egypt witnessed 

a significant increase in the number of tourist arrivals reaching 

9.8 million tourists in FY07, representing a y-o-y growth of 

12.6%. 

Types of tourism in Egypt 

Egypt has traditionally relied on its archaeological heritage to 

attract tourists, but is now attempting to diversify in order to 

increase the prospect of repeat visits. Beach tourism now rivals 

historical tourism, and major hotel constructions continue along 

the Sinai and Red Sea coasts, which host some of the world's 

finest coral reefs. Additionally, ecotourism, therapeutic tourism, 

and recreational tourism are also strengthening. 

Cairo remains an active venue for business travel with a number 

of international conferences and exhibitions. Moreover, cultural 

tourism gained popularity in the city, due to its historical heritage. 

Hotel complexes benefit 

from growing tourism 

The tourism industry has been expanding rapidly in Egypt, with 

an increase in both domestic and international travellers in 

recent years resulting primarily from the strong growth in 

disposable income in both the European and MENA regions, 

leading to increased demand for luxury travel accommodations. 

Travel to Egypt from residents of the MENA region has been 

increasing in the aftermath of 9/11 attacks. With 1.7 mn visitors 

from the MENA region in 2006, constituting 19% 

54-55 

of the total number of tourists, Egypt continues to be one of the 

most popular tourism destinations and a home away from home 

for many. In addition to the recent changes in Egypt's property 

law, attractive land and property prices have encouraged many 

Arabs to purchase holiday homes in Egypt, which remains a 

favourite perennial. 

Key tourists' inflow destinations are Europe and the Middle East, 

representing a significant combined share of 87% of total arrivals 

to Egypt. Repeated visits from these areas highlight potential 

purchasing of a second home, thus, serving as a target market 

for residential tourism. 

Government objectives, 

initiatives, and projections 

Realizing the enormous opportunities in the sector, both the 

government and the private sector are focused on developing 

tourism services. The majority of the development is taking place 

in Sinai, the Red Sea Coast, and the North Coast. Furthermore, 

the Ministry of Tourism has an ambitious plan to increase arrival 

hits to 16 million by 2015 and maintain an annual sector growth 

of 12%, aiming to increase room capacity to 140,000 rooms 

within the next five years. If the government manages to meet 

its target, US$7.6 billion in revenue should be generated within 

that time span.

“ TMG identified a gap in the Egyptian market for highend 

hotels and a lack of luxury tourism facilities despite 

rising investments and economic growth.” 

Hotels & Resorts Review 

Four Seasons Sharm EL Sheikh 


TMG's Hotel and Resorts Complexes 

Leveraging on the C&C model, TMG was able to capture a 

niche in the luxury, high-end hotel market. TMG identified, 

through its market research, a gap in Egypt for luxury hotels, 

including associated residential units targeting the upper income 

class segment, business communities, and tourist visitors and 

created due to the growth in travellers to Egypt for both tourism 

and business purposes and increasing wealth generally in the 

MENA region. Thereby, TMG introduced three 5 star-hotels with 

over 690 rooms/keys established to meet international standards 

managed by the Four Seasons Hotel. Additionally, TMG is 

currently establishing a resort in Marsa Alam and in the process 

of renovating the Nile Hotel in Cairo with 221 rooms targeting 

business customers and expected to be launched in 2009. 

TMG pioneered in the luxury hotel business, being the first to 

introduce services which meet international standards fulfilling 

both the present and future needs of customers, and receiving 

many awards such as Gallivantor Guide UK, 2005 Top 5 “Best 

Resort Europe/ Middle East and Africa”. The Hotels and resorts 

(H&R) development project operations of TMG mirrors the City 

and Community (C&C) development approach in which the 

high end residential properties available for sale are developed 

alongside the hotels, favoured with access to the hotel complex 

facilities. 

56-57 

Four Seasons, Nile Plaza 

Increase weighting of stable revenues 

from hotel and resort complexes 

TMG intends to expand its hotel and resort business through 

investments in, or the acquisition of, hotel and resort complexes 

or increasing its investments in the Group subsidiaries through 

which it carries out this business. The company intends to use 

its existing model of combining a luxury hotel with residential 

units to increase the proportion of stable revenues generated 

by its hotel operations.

Four Seasons, San Stefano 

H&R Projects in Operation & Development: 

Four Seasons 

Sharm El 

Sheikh 

Four Seasons 

Nile Plaza 

Four Seasons 

San Stefano 

Nile Hotel 

Marsa Alam 

% Owned (1) : 58% 

Location : Sharm 

El Sheikh 

% Owned (1) : 56% 

Location: Cairo 

% Owned (1) : 84.47% 

Location: Alexandria 

% Owned (1) :100% 

Location: Cairo 

% Owned (1) : 99.9% 

Location: Marsa Alam 

Rooms/keys : 200 

Units : 146 

Sold : 91 

Av. Price : LE 11,761 psm 


Units : 131 

Sold : 93 



Units : 945 

Sold : 805 



Units : 0 

Sold : n/a 

Av. Price : n/a 


Units : 2,250 resi. rooms 

Sold : n/a 

Av. Price : n/a 

1- % owned by ICON, which is 81.31% indirectly owned by TMG 

2- Commencement of operations 

Commence : November 1998 

Complete (2) : May 2002 

Star Rating : 5 Star 

Commence : September 1997 

Complete (2) : August 2004 


Commence : February 1999 

Complete (2) : July 2007 


Commence : August 2005 

Complete (2) : Early 2009 

Star Rating : Planned 5 Star 

Commence : TBC 

Complete (2) : TBC 

Star Rating : Planned 4/5 Star 


Four Seasons, Sharm El Sheikh 

Facilities: 

Facilities: 

Facilities: 

Facilities: 

Facilities: 

8 Restaurants 

2 Lounge Bars 

Spa 

Ballroom 

4 Meeting Rooms 

Business Center 

9 Restaurants 

Spa 

Ballroom 



Shopping mall 

9 Restaurants 

Marina 

Shopping mall 

Ballroom 

Offices 

Casino 

4 Restaurants 



Executive club 

Mini business 

Centre 

4 Hotels 

Central Lagoon 



Location Cairo 

Rooms/keys 365 

Total units 131 units (BUA 44,646 m 2 ) 

Sold units 93 (BUA 32,384 m 2 ) 

Operator Four Seasons 



Average room rate 2,048 LE / US$ 366 

Four 

Seasons 

Nile 

Plaza 

58-59




Four Seasons Cairo at Nile Plaza 

Four Seasons Hotel Cairo at Nile Plaza 

The Four Seasons Hotel Cairo at Nile Plaza opened in August 

2004 entailing a luxurious 5-star hotel with a total capacity of 

365 rooms/keys, including 72 suites in a high-rise landmark 

building located in the classy district of Garden City in the heart 

of Cairo, overlooking the River Nile. 

Amenities and facilities of the hotel include nine restaurants, a 

spa and wellness centre, indoor and outdoor swimming pools, 

a business centre, conference facilities, as well as a ballroom. 

The Four Seasons Hotel Cairo at Nile Plaza attracts tourists as 

a result of its location on the Nile and proximity to the cultural 

tourist destinations within Cairo as well as business travellers. 

Meanwhile, the residential area attached to the hotel is composed 

of 131 units, of which 72 are Plaza suites over a total BUA of 

17,500 sqm, and 59 residential units spread over a BUA of 

27,100 sqm with an average area per unit of 341 sqm. Plaza 

suites may, at the homeowner's option, be serviced and maintained 

by Four Seasons, and are sold to homeowners to use as 

residences. It is intended that these units may, at the homeowner's 

option, be added to the hotel rental program, the revenue of 

which to be equally split between the homeowners and the 

60-61 

One of the Hotel guest rooms 

company. 93 units representing 71% of the total units are already 

sold, and the remaining 38 units are expected to be sold by the 

end of 2008. 

The property also features 4,700 sqm of saleable office space 

and 6,780 sqm of commercial space for lease, all of which 

have already been fully sold and leased, in addition to a large 

underground parking area.

“ TMG pioneered in the luxury hotel business, being 

the first to introduce hospitality services which meet 

international standards fulfilling both the present and 

the future needs of customers.” 


Beymen Store An amazing Nile view 



Location Sharm El Sheikh 


Total residential units 146 units (BUA 23,810 m 2 ) 

Sold residential units 91 units (BUA 15,675 m 2 ) 




Average room rate 1,930 LE / US$ 345 

Four 

Seasons 

Sharm 

El Sheikh 

62-63






The Four Seasons Resort Sharm El Sheikh opened in May 2002 

and contains 200 rooms/keys, including 27 suites and 64 family 

bedroom suites. In addition to the hotel, the property includes 

a residential component on 23,800 sqm of land, comprising 

34 villas and 112 chalets. 64 of these chalets, at the homeowner's 

option, were added to the hotel rental program, and furnished 

and serviced by Four Seasons, the revenue of which to be split 

equally between the owner of the chalet and the company. At 

the end of 2007, 24 villas and 67 chalets had been sold. 

Additionally, TMG owns 64 residential units used for renting by 

the Four Seasons. 

The resort is located on the coastal strip between the Red Sea 

and Mount Sinai, with access to world-class snorkelling and 

scuba diving locations. Amenities and facilities include eight 

restaurants, two lounge bars, conference facilities, a spa and 

wellness centre with private treatment rooms and outdoor 

massage areas, two pools, a diving centre, three tennis courts, 

and a specialty boutique. 

64-65 

A villa dining and living room 

The resort extension will have a total area of 909,240 sqm and 

will comprise a golf course in addition to 102 villas with an 

average space per villa of 545 sqm. The golf course is scheduled 

for completion by early 2012, and construction of villas 

surrounding it will start directly after the operation of the golf 

course. The Four Seasons Resort Sharm El Sheikh attracts visitors 

from all over the world and is a favoured venue for corporate 

conferences and other business meetings, as well as weddings 

and other functions.

“Best Resort Europe/Middle East and Africa” 

on Gallivantor Guide UK’s 2005 Top 5 


The "Reef Grill" restaurant The Resort private beach 



Location Alexandria 


Total residential units 945 (BUA 250,425 m 2 ) 

Sold residential units 805 (BUA 207,300 m 2 ) 



TMG participation 84.47 % 

Average room rate 1585 LE / US$ 283 

Four 

Seasons 

San 

Stefano 

66-67




Four Seasons Hotel Alexandria at San Stefano 

Four Seasons Hotel Alexandria at San Stefano 

The San Stefano complex is located in Alexandria, Egypt's second 

largest city by the sea coast. The complex enjoys the 

Mediterranean sea view, as it has a 170 m beach frontage and 

is 45 m away from the sea front. The project is developed on 

a total land area of 30,000 sqm and is 35 floors high. It is the 

first luxury hotel according to the international standards to be 

constructed in Alexandria, with amenities and facilities including 

nine restaurants, a ballroom, conference facilities, a spa and 

wellness centre, a swimming pool overlooking the Mediterranean 

Sea, a casino, and a marina which is expected to be completed 

in summer 2009 and to include 750 m of beach for entertainment 

purposes. The complex including the 127- room Four Season's 

run hotel was inaugurated in July 2007. 

The Four Seasons Hotel Alexandria at San Stefano aims to 

attract visitors from throughout Egypt and the world both for 

tourism and business. It is also expected to be frequently used 

for corporate conferences and other business meetings, as well 

as weddings and other functions. 

The complex also includes a residential component comprising 

945 residential apartments ranging from 131 to 1,271 sqm, 

68-69 

One of the Hotel guest rooms 

of which 805 apartments, 85% of the total, had been sold as 

at December 31st, 2007. The remaining 15% of the residential 

apartments are expected to be leased. The residential component 

occupies approximately 28,000 sqm of land and is expected 

to be completed in 2009. At the homeowner's option, these 

units may be furnished and serviced by the Four Seasons and 

included in the hotel rental program. Income from the units 

included in the hotel rental program is split equally between the 

owner of the unit and the company. 

The complex also contains 10,000 sqm of office space and 

conference suites, and a retail mall occupying 43,000 sqm over 

four floors with 200 retail units, of which 130 had been sold 

at the end of 2007, to retailers including some internationally 

recognised brands. The mall includes a parking garage with 

capacity for 2,200 cars.

“ Luxurious apartments.. Exotic destination.. Unparalleled 

amenities.” 


"Kala" Restaurant A 4-storey shopping mall 



Location Cairo 




Status Expected to open in 2009 

Nile 

Hotel 

TMG is currently revamping Nile Hotel to be the first luxury 

business hotel in Egypt located in the Garden City area of Cairo 

next to the British Embassy and near the Four Seasons Hotel 

Cairo at Nile Plaza. The project is expected to be complete in 

2009. The Nile Hotel has a total capacity of 221 rooms/keys 

including executive club rooms, junior suites, executive suites, 

and a presidential suite. The Nile Hotel is overlooking the Nile, 

and its amenities and facilities will accommodate the needs of 

business travellers and offer business facilities to local business 

clients, including state of the art conference and meeting centres, 

a 24-hour business centre, computer availability, and internet 

access for every room. The hotel will also include four restaurants 

and lounges, a spa and wellness centre, and a swimming pool 

located at the top floor. 

TMG is currently in advanced negotiations with several hotel 

management firms for the operation of the Nile Hotel. It is 

70-71 

seeking a management firm that will complement TMG's other 

operating hotels. 

The precise specifications for the hotel will be determined based 

on the criteria required by the selected management company.

Location Marsa Alam 

Land area (m 2 ) 3,256,285 


Residential rooms 2,250 


TMG Participation 99.9% 

Status Currently under development 

Marsa 

Alam 

Resort 

Marsa Alam project is aimed to be a high end tourist resort, 

located on the West Coast of the Red Sea where it meets the 

Arabian desert nearby the Tropic Cancer occupying a land area 

of 3.3 mn sqm. TMG plans to establish four separate luxury 

hotels, to be surrounded by a lagoon containing a total of 750 

hotel rooms and 2,250 residential units to be sold and rented 

in two to three bedroom units. Amenities and facilities are 

expected to include restaurants and bars, conference facilities, 

a spa and wellness centre, swimming pools, tennis courts, and 

several specialty boutiques. The resort is currently designed so 

that the sea will flow into lagoons that will surround the hotels, 

and each hotel in the resort complex will have its own beach. 

Marsa Alam has become one of the fastest growing holiday 

destinations on the Red Sea Riviera, especially since the opening 

of the international airport in 2001. The area is known for its 

snorkelling, scuba diving, and surfing attractions. The Marsa 

Alam resort will aim to attract visitors from throughout the world 


and is expected to be a favoured venue for corporate conferences 

and other business meetings, as well as weddings and other 

functions. 

TMG is in negotiations with several hotel management firms for 

the operation of the Marsa Alam resort. It is seeking a 

management firm with hotel brands that will complement TMG's 

other operating hotels. 

The resort's total investment cost is estimated at LE 2 bn to be 

incurred over a 6-year period. Construction will be carried over 

4 overlapping phases with the first hotel to be inaugurated in 

2010, followed by a new hotel each year till 2012. Moreover, 

the master plan dedicates for the project to have its own 

downtown and entertainment area including units for shops, 

cafés, and leisure facilities that will be either leased or sold. 


International Expansion Strategy 

“Through regional expansion, TMG is expected to widen its scope of 

operation, enhance its value, and maintain its current growth profile.” 

Leveraging on its City and Community model within the local 

market, TMG plans to expand its development platform 

internationally, particularly in further locations where it could 

have competitive advantages similar to those in its domestic 

market. Such regional expansion is expected to widen the 

company's scope of operation, enhance its value, and maintain 

its current growth profile. 

To replicate its success in the Egyptian market, TMG is looking 

at markets that could enjoy similar conditions, such as a large 

and growing population, a relatively underdeveloped real estate 

market, especially in the middle and high middle class segments, 

a government policy that is geared towards increasing housing 

and that provides a robust legal environment which recognises 

land rights, and a stable political environment. 

When designing developments in other countries, TMG intends 

to tailor its plans to accommodate local requirements and 

customs that would make the development more attractive to 

the local population. Thus, upon entering foreign markets, TMG 

also looks for joint ventures with well regarded and reputable 

local partners. 

The first step .. 

entering the Saudi market 

In 2007, TMG has already entered into the Saudi market through 

joint venturing with a local development company to capitalize 

on the growing and unmet residential demand in the Kingdom, 

estimated at 850,000 residential units per annum. The Saudi 

subsidiary, Thabat, will develop city and community complexes 

in each of Riyadh and Jeddah on a total land area of 5.9 mn 

sqm. 

TMG has already had a sales office in Saudi Arabia since 1991, 

which has developed a number of contacts in, and knowledge 

of the Saudi market, and has also conducted market research 

on the viability of city and community complexes there. 

72-73 

Management of TMG strongly believes that the many similarities 

which the Saudi real estate market shares with its Egyptian 

counterpart, including a stable legal environment and favourable 

demographics, deem it to be an attractive market for residential 

real estate developments. TMG intends to largely replicate its 

existing sales model in Saudi Arabia, by using the same selling 

techniques and requiring payment of the full construction cost of 

units in advance of delivery of the units. 

International expansion in 

the hotels & resorts segment 

On the other hand, as part of its overall strategy to increase 

weighting its stable revenues from the hotels & resorts line of 

business, TMG is also looking at expansion opportunities in this 

segment into emerging and Eastern European markets, recognized 

for a growing tourism sector and a stable economy. TMG has 

hired HVS, a specialized market research firm, to perform a 

market study to assess market opportunities in such markets, 

and will base its expansion plan on the outcome of this research.

Corporate Social Responsibility 

“TMG takes responsibility for the impact of its activities on customers, 

suppliers, employees, shareholders, communities and other stakeholders, 

as well as the environment.” 

Corporate Social Responsibility (CSR) is a concept whereby 

TMG considers the interests of society by taking responsibility 

for the impact of the Group's activities on customers, suppliers, 

employees, shareholders, communities and other stakeholders, 

as well as the environment. 

This obligation is seen to extend beyond the statutory obligation 

to comply with legislation and sees the Group's voluntarily taking 

further steps to improve the quality of life for clients and their 

families as well as for the local community and society at large. 

The practice of the Group's CSR is mainly benefiting the society 

in multiple ways: 

The establishment of public-private partnerships with 

the government and NGOs 

TMG Holding is helping to create a better life for the underprivileged 

residents of a number of slum areas through supporting 

the Future Foundation in its housing, educational, medical and 

social activities. TMG Holding is collaborating with the Future 

Foundation, the government, and civil society aiming at making 

a difference in people's lives and the future of the country by 

supporting the basic services provision and community 

development programs. As such, the Group has also taken part 

in the upgrade of AL-Agouza and Heteya neighborhoods. 

Also, TMG Holding has participated in supporting the programs 

tackled by the Future Generation Foundation aiming at developing 

the country's business sector thus enabling it to compete in the 

global arena. TMG Holding-FGF seeks to transform the culture 

of the private sector and re-orient it to international levels of 

excellence and achievement through the development of its 

human resource sector. 

Art and Encyclopedia sponsorships 

In light of TMG Holding's recognition of arts, the Group has 

sustained the Actors' Union activities and had an accountable 

involvement as to various undertakings of the Alexandria Artists 

and Creators Association; basically related to supporting the 

Association in delivering its mission of cultural and creativity 

growth. 

TMG Holding also prides itself for sponsoring the 5th anniversary 

celebration of Bibliotheca Alexandrina held in October 2007 

and attended by HE President Mubarak and Mrs. Suzanne 

Mubarak and more than 300 dignitaries, Nobel Laureates, 

Ministers, men of letters, intellectuals, foreign and Arab countries' 

Ambassadors, Bibliotheca Alexandrina Board of Trustees (BoT) 

members, and friends from all over the world. 

Furthermore, the Group has held up the production of the 

"Middle East Encyclopedia” publication as part of sustaining 

cultural and literature periodicals. 

Critical conditions aid 

The Group has backed the activities of the Alexandria Heart 

Patients' Friends Association in the course of funding surgeries 

and medications for critical cases along with financing 

psychological and emotional support. 

Additionally, the Group has given support to Ain Shams University 

Specialized Hospital with regard to a number of serious surgeries 

and appointing highly qualified physicians and surgeons. 


Executive Team 

Hisham Talaat Mostafa 

Chairman and Managing Directopr 

See “Board of Directors’ Biographies” page 12 of this report. 

Sherif Ghoneim 

Vice President for Sales and Marketing 

Sherif Ghoneim is Vice President for Sales and Marketing and 

has been employed by TMG since 1993. Prior to joining TMG, 

he was a Sales Manager for an international development 

company. Mr Ghoneim holds a B.Sc. in Engineering. 

Zaki El Guiziri 

Vice President for Hotels and Business Development 

Zaki El Guiziri is Vice President for Hotels and Business Development 

and has been employed by TMG since 2004. 

Prior to joining TMG, he worked for Chase National Bank from 

1980 until 1984 and then joined Misr America International 

Bank (a subsidiary of Bank of America) as General Manager 

for the Alexandria and Delta Area. Mr El Guiziri holds a B.Sc. 

in Economics from Alexandria University. 

Jihad M. Sawaftah 

Vice President 

Chief Financial Officer 

Jihad M. Sawaftah was appointed Chief Financial Officer of the 

Company in October 2007. Sawaftah is also the Vice President, 

Financial Control and Information Technology Head with 

responsibilities for each of the Operating Companies since 

2004. Before joining TMG, Sawaftah worked with HRH Prince 

Alwaleed Bin Talal Bin Abdulaziz Al Saud and served, among 

74-75 

other positions, as Group Financial Controller of Kingdom Hotel 

Investment Group and as Chief Financial Officer of Kingdom 

Planet Hollywood. Mr Sawaftah holds a B.Sc. in Finance, Banking 

and Accounting from Yarmouk University, Jordan. 

Ali Abdallah 

Vice President for Banking and Real Estate 

Ali Abdallah is Vice President for Banking and Real Estate and 


he was the Investment Development Manager for Faisal Islamic 

Bank for 20 years. Mr Abdallah holds a B.Sc. in Accounting. 

Gamal El Guindy 

Vice President for Administration of the Chairman’s Office 

Gamal El Gindy is Vice President for Administration of the 

Chairman’s Office and has been employed by TMG since 1983. 

Mr Guindy holds a B.Sc. in Accounting. 

Ahmed Afifi 

Vice President for Madinaty Project Management 

Ahmed Afify is Vice President for Madinaty Project Management 

and has been employed by TMG since 1995. Prior to joining 

TMG, he was Manager of the Alexandria branch of AMBRIC 

for four years, and prior to that was the General Executing 

Manager of a construction company in Saudi Arabia. Mr Afifi 

holds a B.Sc. in Engineering.

Mohamed Atef 

Vice President for Technical Affairs 

Mohamed Atef is Vice President for Technical Affairs and has 

been employed by TMG since 2005. Prior to joining TMG, he 

was a Project Manager for Kingdom Investment Hotels Co from 

2004 to 2005 and was a Project Manager for Bechtel International 

from 1997 to 2004. Mr Atef holds a B.Sc. in Engineering. 

Mohamed Ashraf Al Banna 

Vice President for Operations 

Mohamed Ashraf Al Banna is Vice President for Operations and 


he was a Manager in the Hotels Department of Intercontinental 

Dubai after serving as a Consultant of the Minister of Commerce 

in Malaysia. Mr Al Banna holds a B.A. from the American 

University in Cairo. 

Nagi El Touny 

Vice President for Touristic Projects 

Nagi El Touny is Vice President for Touristic Projects and has 

been employed by TMG since 1994. Prior to joining TMG, he 

was the resident manager of the Red Sea Palace Hotel, in 

Jeddah, KSA which is managed by Jester the Swiss management 

international company. He holds a Diploma of Hospitality 

accredited by Ecole Hoteliere De Lausanne whereby he had 

pursued his studies in Jester's specilaized training center during 

the period from 1978 to 1980. 

Sabry Kamal 

Vice President for Quality and Systems 

Sabry Kamal is Vice President for Quality and Systems and has 

been employed by TMG since 1995. He previously served as 

Area Sales Manager of Al Futtaim Motors (Toyota) for 14 years. 

Mr Kamal holds a B.Sc. in Accounting. 

Sami Mokhtar 

Vice President for San Stefano Project 

Sami Mokhtar is Vice President for San Stefano Project and has 

been employed by TMG since 1992. He holds a B.Sc. in 

Engineering. 

Ayman Ali 

Vice President for Human Resources 

Ayman Ali is Vice President for Human Resources and has been 

employed by TMG since 2005. Prior to joining TMG, he was 

a Human Resources Consultant in Cairo for two years, after 

serving as the Human Resources Director of Derry Technological 

Services from 1998 to 2003. Mr Ali holds a B.Sc. in Accounting, 

as well as an M.B.A. and Master of Science in Human Resources 

from an American University. 


Financial Review

CFO Report 

Proforma Financials: 

Review Report of the Auditors 

Consolidated Proforma Financial Statements 

Notes to the Consolidated Proforma 

Financial Statements 

Consolidated Financials: 

Review Report of the Auditors 

Consolidated Financial Statements 

Notes to the Consolidated Financial 

Statements

CFO Report 

Dear Shareholders, 

At TMG we continue to post strong financial results generated 

from a growth-oriented asset mix and a deep understanding of 

the market dynamics and customer needs, and again we have 

exceeded our 2007 financial targets. 

2007 marked the consolidation of the real estate development and 

hospitality activities conducted by companies in which the Talaat 

Moustafa Group had significant interests into one holding company. 

In October 2007, the company’s issued and paid up capital was 

increased to be LE20,302,035,500 divided over 2,030,203,550 shares, 

whereby the Company increased, through a series of transactions, 

its direct and indirect ownership in Arab Company for Urban Dev 

& Projects SAE, San Stefano Real Estate SAE and Alexandria Real 

Estate SAE 99.9%, 100%* and 98.6% of the issued and outstanding 

shares, respectively, and increased its direct and indirect ownership 

in Alexandria for Urban Projects SAE to 100% of the issued and 

outstanding shares. 

In addition, the company's indirect ownership reached 81.31%* 

of the Arab Company for Hotels and Tourism Investment ("ICON"), 

which holds the Group’s interests in its hotel and resort complexes 

Four Seasons Nile Plaza, Four Seasons Sharm El Sheikh, San Stefano 

Grand Plaza, Nile Hotel and Marsa Alam Resort Project. 

In November 2007, following this restructuring process, TMG 

successfully offered 395 mn shares through a retail offering and 

an institutional and international offering at a ratio of 16.5% and 

83.5%, respectively. The institutional and international offering took 

place over two tranches at a price of LE 11.6/share; the primary 

tranche amounted to 215 mn shares, while the secondary tranche 

amounted to 115 mn shares. The retail offering, amounting to 65 

mn shares, was executed at a price of LE 11/share, a 5% 

discount from the institutional and international offering price. 

Results of the offerings revealed an outstanding interest from Arab 

and international investors, whereby the subscription to the 

institutional and international offering was covered 17x with total 

bids of LE 65 bn, while the retail offering was covered 41.4x, receiving 

total bids of LE 29.6 bn. 

Finally, on November 28, 2007, TMG's shares started to trade on 

CASE under the code TMGH.CA. 

We are moving into 2008, from a position of considerable financial 

strength and with an ongoing commitment to corporate disclosure 

and governance excellence. 

We are growing with a focus on future opportunities and 

maximizing value for our shareholders, customers, and team 

members whereby the IPO proceeds will be utilized to fund existing 

and future development projects, acquisitions, and investments 

both within Egypt and across the MENA Region and Europe. 

* TMG Group structure in July 31 th , 2008 

78-79 

Financial Review 

TMG Holding (proforma consolidated results)* In LE 

Total long term assets 32,055,195,545 

Net working capital 7,101,209,815 

Total investments 39,156,405,360 

Total shareholders equity excluding minority interest 21,823,872,123 

Total revenues 1,875,717,794 

Gross Profit 850,650,730 

Gain on sale of investments & other 1,085,574,924 

Net profit after tax and minority interest 1,340,979,009 

* Pro-forma consolidated results assumes that the acquisition of 

TMG's subsidiaries took place on January 1 st , 2007 instead of 

the actual date which is October 28 th , 2007. 

TMG Holding (consolidated results)* In LE 

Total revenues 431,413,137 

Gross Profit 255,966,517 

Net profit after tax and minority interest 195,395,347 

* Actual Results from October 28 th , to December 31 st , 2007. 

Asset growth 

At December 31 st , 2007, Total assets reported LE 43 bn of which 

cash and cash equivalent amounted to LE 4.3 bn, representing 

10% of total assets. On the other hand, total liabilities reported LE 

18.9 bn of which debt amounted to LE 2.1 bn, implying a net cash 

position of LE 2.3 bn. 

Financial resources and capital structure 

During 2007, the company's financial statements showed a net 

cash flow from operating activities of a negative LE 14.88 bn which 

was mainly due to the following: 

i- an increase of LE 9.53 bn in the short and long term accounts 

and notes receivable (post dated checks) that are related to the 

pre-sales customers' future payments and, 

ii- an increase in construction work by LE 8.7 bn. which has mainly 

comprised of (a) LE 2.13 bn of unpaid land cost and (b) LE 2.1 

bn relating to the development of hotels and other fixed assets 

that are still under construction. Once completed, these will be 

added to the company's fixed assets and hence reflected in 

the cash flow from investing activities. 

Based on the above, our net cash flow from operating activities 

would amount to a positive LE 560 mn. 

Managing the Group’s cost and structure of borrowing is a key 

objective and our outstanding borrowings are non-recourse and 

floating-rate, primarily to US$ LIBOR. During 2007, the Group’s 

weighted average cost of debt was 7.5% for the US $ Borrowings. 

The Group’s weighted average cost of debt in LE was 1.25 % over 

the discounted rate set by the Central Bank of Egypt. 

The Group’s balance sheet remains conservatively leveraged at 

10% gearing, with the bulk of construction work being self financed 

through down payments from customers.

CFO Report 

Income statement and operational performance 

Total pro-forma consolidated revenues for 2007 reached LE 1.87 

bn. Revenue from real estate development business accounted 

for 85% of revenues, with hotels net revenues and services revenues 

accounting for the remaining 15%. Gross profit reached LE 850 mn 

implying a gross profit margin of 45%. 

12% 

Gross profit from real estate reported LE 601 mn, implying a gross 

profit margin of 38%. 

Revenues from sold units and cost of sold units are recognized upon units' 

delivery. Accordingly, revenues are recognized on the income statement 

when the completed units are delivered to unit owners. As a result, total 

revenues figure recognized on the income statement does not reflect 

sales achieved during the year, but is rather related to the completed and 

delivered units that have been sold in prior periods. 

As at December 31, 2007, TMG had a backlog of sold units, with a total 

value of LE 16.7 bn that are estimated to be recognized over the next 

three years. 

LE mn 

7,000 

6,000 

5,000 

4,000 

3,000 

2,000 

1,000 

0 

3% 

5,500 

85% 

Net Revenue from hotel operations of LE 228.6 mn. was the 

outcome of the improvement in the hotels key performance 

6,600 

Revenue from Sold Units 

Net Revenue 

from Hotel Operations 

Services Revenue 

4,600 

2008 2009 2010 

Estimated Recognized Value 

Actual % to pro-forma % to 

31/12/2007 total 31/12/2007 total 

LE LE 

Revenue from Sold Units 332,569,212 77% 1,598,606,173 85% 

Net Revenue from Hotel Operations 57,465,428 13% 228,624,500 12% 

Services Revenue 41,378,498 10% 48,487,121 3% 

Total Revenue 431,413,138 100% 1,875,717,794 100% 

Cost of Sold Units 150,749,233 45% 997,858,624 62% 

Cost of Sold Services 24,697,387 60% 27,208,440 56% 

Total Cost 175,446,620 41% 1,025,067,064 55% 

Gross profit 255,966,517 59% 850,650,730 45% 

indicators with a 23% increase in the combined ARR from US$ 290 

in 2006 to US$ 356 in 2007 and a 26% increase in combined RevPar 

from US$ 190 in 2006 to US$ 239 in 2007, implying an improvement 

in the occupancy rates as well. 

Gross profit from services reported LE 21.3 mn, implying a gross 

profit margin of 44% from service companies relating to the Group's 

projects. 

The company’s marketing, general and administrative expenses 

recorded LE 270.2 mn, and the interest expense figure for the same 

period reached LE 13.7 mn, collectively forming an expense figure 

of LE 283.9 mn, which is 50% offset by the credit interest earned 

on deposits, interest earned on T-bills and T-bonds, and investment 

income, collectively amounting to LE 141.7 mn 

Net profit recorded LE 1.341 billion for 2007. 

Key Operational Highlights for 2007 

City and Community Complexes (C&C) 

Real estate sales – units sold 

12,000 

10,000 

8,000 

6,000 

4,000 

2,000 

Real estate sales – LE bn 

12 

10 

8 

6 

4 

2 

0 

0 

7,570 

6.2 

67% 

39% 

10,520 

2006 2007 

10.4 

2006 2007

CFO Report 

Real estate sales breakdown – units sold 

7,000 

6,000 

5,000 

4,000 

3,000 

2,000 

1,000 

0 

4,541 

6,295 

2,783 

4,008 

96 77 120 102 

Madinaty Al Rehab Al Rabwa San Slefano 

2006 2007 

Real estate sales breakdown – LE mn 

7,000 

6,000 

5,000 

4,000 

3,000 

2,000 

1,000 

0 

4,060 

6,730 

1,453 

2,835 

LE bn 

2006 % 2007 % 

Madinaty 4.0 66% 6.7 65% 

Al Rehab 1.4 23% 2.8 27% 

Al Rabwa 0.2 3% 0.2 2% 

San Stefano 0.3 4% 0.3 3% 

Sharm El Sheikh 0.0 0% 0.0 0% 

Nile Plaza 0.2 4% 0.3 3% 

Total 6.1 100% 10.4 100% 

During 2007, total real estate units sales amounted to LE 10,368 

mn (10,520 units sold) in comparison of LE 6,184 mn (7,570 units 

sold) in 2006 showing a significant growth of 67% in sales and 39% 

in terms of units sold compared to 2006. Madinaty project 

accounted for 60% of total units sold and 66% of total sales in 2007, 

whereas Al Rehab project accounted for 38% of total units sold 

and 27% of total sales. 

187 

Madinaty Al Rehab Al Rabwa 

Real estate sales breakdown 

2006 2007 

205 

Units Sold 

2006 % 2007 % 

Madinaty 4,541 60% 6,295 60% 

Al Rehab 2,783 37% 4,008 38% 

Al Rabwa 96 1% 77 1% 

San Stefano 120 2% 102 1% 

Sharm El Sheikh 3 0% 12 0% 

Nile Plaza 27 0% 26 0% 

Total 7,570 100% 10,520 100% 

80-81 

Madinaty 

Total sales in 2007 amounted to LE 6.7 bn (6,295 units) in comparison 

to LE 4.06 bn (4,541 units) in 2006 (6 months, since the launch of 

sales in July 2006) showing a growth of 66% and 39% in sales and 

sold units, respectively. Moreover, the continuous increase in 

average selling prices of both villas and apartments from LE 4,378 

psm and LE 2,400 psm at launch of sales in July 2006 to reach LE 

8,160 psm and LE 3,505 psm by the end of 2007, respectively, 

explains the significant increase in sales. 

Madinaty - Units Sold 

7,000 

6,000 

5,000 

4,000 

3,000 

2,000 

1,000 

Madinaty - LE bn 

7 

6 

5 

4 

3 

2 

1 

0 

Madinaty 

0 

9000 

8000 

7000 

6000 

5000 

4000 

3000 

2000 

1000 

0 

4,378 

2,400 

Jul-06 

Aug-06 

Sep-06 

Oct-06 

4.06 

4,541 

39% 

6,295 

2006 2007 

Villa 

Apartment 

Nov-06 

Dec-06 

66% 

Jan-07 

Feb-07 

Mar-07 

Apr-07 

May-07 

Jun-07 

6.7 

2006 2007 

Jul-07 

Aug-07 

Sep-07 

Oct-07 

8,160 

3,505 

Nov-07 

Dec-07

CFO Report 

Al Rehab 

During 2007, the company sold 4,008 units compared with 2,783 

units in 2006. Total sales in 2007 amounted to LE 2.84 bn in 

comparison to LE 1.453 bn in 2006 showing a remarkable growth 

of 95%. Said growth resulted from the 50% increase in units sales 

coupled with increase in average selling prices of both villas and 

apartments by 41% and 65% to LE 8,670 psm and LE 3,660 psm, 

respectively. 

Al Rehab - Units Sold 

4,500 

4,000 

3,500 

3,000 

2,500 

2,000 

1,500 

1,000 

Al Rehab - LE bn 

3.0 

2.5 

2.0 

1.5 

1.0 

0.5 

0.0 

500 

0 

Al Rehab 

10000 

9000 

8000 

7000 

6000 

5000 

4000 

3000 

2000 

1000 

0 

Jul-06 

Aug-06 

2,566 

1,236 

Sep-06 

Oct-06 

2,783 

1.45 

Villa 

Apartment 

Nov-06 

Dec-06 

95% 

Jan-07 

Feb-07 

44% 

Mar-07 

Apr-07 

May-07 

Jun-07 

4,008 

2006 2007 

2.84 

2006 2007 

Jul-07 

Aug-07 

Sep-07 

Oct-07 

8,670 

3,660 

Nov-07 

Dec-07 

Al Rabwa 

During 2007, the company sold 77 units compared with 97 units 

in 2006. Total sales in 2007 amounted to LE 205 mn in comparison 

to LE 187 mn in 2006 showing a growth of 10% resulting from 25% 

increase in villas’ average selling prices from LE 5,876 psm in 2006 

to LE 11,930 psm in 2007. 

Al Rabwa - Units Sold 

100 

90 

80 

70 

60 

50 

40 

30 

20 

10 

0 

Al Rabwa -LE bn 

0.25 

0.20 

0.15 

0.10 

0.05 

0.00 

Al Rabwa 

14000 

12000 

10000 

8000 

6000 

4000 

2000 

0 

Jul-06 

Aug-06 

5,876 

Sep-06 

Oct-06 

96 

Villa 

Nov-06 

Dec-06 

Jan-07 

Feb-07 

20% 

Mar-07 

Apr-07 

May-07 

Jun-07 

77 

2006 2007 

0.187 

10% 

0.205 

2006 2007 

Jul-07 

Aug-07 

Sep-07 

Oct-07 

11,930 

Nov-07 

Dec-07

CFO Report 

Hotel & Resorts projects in operation 

In addition to its City and Community complexes, the Company 

has developed 3 large scale mixed use developments each of 

which include a luxurious hotel operated by the Four Seasons, and 

has two other H&R projects under development. 

Four Seasons Sharm El Sheikh, average occupancy increased from 

58% in 2006 to 67% in 2007 coupled with increase in average room 

rate by 20% from US$287 in 2006 to US$345 in 2007. Moreover, 

RevPAR showed a 39% increase from US$166 in 2006 to US$231 

in 2007. 

Four Seasons Sharm El Sheikh - Rev. Per 

250 

200 

150 

100 

50 

0 

Four Seasons Sharm El Sheikh - ARR 

35020% 

300 

250 

200 

150 

100 

50 

0 

287 

345 

2006 2007 

Four Seasons Sharm El Sheikh - GOP 

60% 

50% 

40% 

30% 

20% 

10% 

0% 

166 

46.70% 

82-83 

39% 

10% 

231 

2006 2007 

51.30% 

2006 2007 

As for Four Seasons Nile Plaza, average occupancy recorded 71% 

in both 2006 and 2007. In addition, average room rate increased 

by 25% from US$292 in 2006 to US$366 in 2007. Moreover, RevPAR 

showed a 25% increase from US$208 in 2006 to US$261 in 2007. 

Four Seasons Nile Plaza - Rev. Par 

300 

250 

200 

150 

100 

50 

0 

Four Seasons Nile Plaza - ARR 

400 

350 

300 

250 

200 

150 

100 

50 

0 

208 

292 

Four Seasons Nile Plaza - GOP 

60 

50 

40 

30 

20 

10 

0 

25% 

25% 

2007 also marked the commencement of operations of Four 

Seasons San Stefano and complex, (15 July 07). Its average 

occupancy reached 48% with an average room rate of US$283 

and a RevPAR of US$135. Moreover, residential unit sales increased 

by 39 units from 766 units in 1H07 to reach 805 units by the end 

of FY07. 

261 

2006 2007 

366 

2006 2007 

705% 

60.60 

63.90 

2006 2007

CFO Report 

Outlook 

In the immediate future, TMG is expanding its city and community 

complexes’ business to Saudi Arabia through a joint venture with 

Saudi Partners to develop projects in both Riyadh and Jeddah that 

are similar to TMG’s Al Rehab complex. Sales for Riyadh project is 

scheduled to be launched in summer 2008. 

TMG believes that the real estate market in Saudi Arabia has many 

characteristics in common with the Egyptian market, including a 

stable legal environment and favorable demographics. Moreover, 

TMG is familiar with the Saudi Arabian market, having maintained 

a sales presence there since 1991. 

TMG plans to keep on evaluating additional opportunities for 

expanding its development platform internationally, particularly 

in further locations where it believes it would have competitive 

advantages similar to those in its domestic market. 

TMG will continue to adopt the concept of phased sales and 

construction which allows the company to adapt construction of 

each phase to meet changes in demand for different types, styles, 

and sizes of units that may arise due to changes in income levels, 

average household size, lifestyle, and consumer preferences. It also 

helps to ensure that development of large projects is manageable 

and, therefore, avoid carrying an inventory of unsold units in the 

event of an unexpected market decline. 

TMG is also taking serious steps towards expanding its hotel and 

resort business both locally and internationally through investments 

in, or the acquisition of, hotel and resort complexes or increasing 

its investments in the Group subsidiaries through which it carries 

out this business. TMG plans to finance this expansion through a 

mixture of debt and equity financing. In doing so, TMG intends to 

use its successful model of combining a luxury hotel with residential 

units, commercial space, and an office park to increase the 

proportion of stable revenues generated by its hotel operations. 

Sincerely 

Jihad M. Sawaftah 

Vice President 

Chief Financial Officer

Review Report 

To The Board of Directors of Talaat Mostafa Group Holding “TMG Holding” (S.A.E) 

We have performed a review for the accompanying consolidated Pro-forma financial statements of TALAAT MOSTAFA GROUP HOLDING 

“TMG HOLDING” (S.A.E) represented in the consolidated Pro-forma balance sheet as of 31 December 2007 and the related consolidated 

Pro-forma income statement, statement of changes in shareholders’ equity and statement of cash flows for the period from 1 January 

2007 to 31 December 2007. we have audited the historical financial statements of TMG holding (the company ) and associates companies 

as of 31 December 2007 and issued our reports for the companies dated 28 February 2008 and Pro-forma adjustments related to historical 

balances of these finical statements. Pro-forma adjustments were prepared according to managements judgments which disclose in 

disclosure (2b) .These consolidated Pro-forma financial statements are the responsibility of the Company’s management. Our responsibility 

is to issue a report on the adjustments related to historical balances of these consolidated Pro-forma finical statements based on our 

review. 

The purpose of consolidated Pro-forma financial statements is showing the significant effects that make acquisition on the historical 

financial statements that if the acquisition were done on the associates companies in 1 January 2007. 

The Pro-forma that prepared and provided by the management is an applicable basis to prepare consolidated Pro-forma financial 

statements, the related hypothesis adjustments reflects the impacts of this Pro-forma, adjustments of the historical financial statements 

as it appeared in the consolidated Pro-forma financial statements of 31 December,2007 and the related consolidated Pro-forma income 

statement, statement of changes in shareholders’ equity and statement of cash flows for the period from 1 January 2007 to 31 December 

2007. 

As per our review of the consolidated pro-forma financial statements of TALAAT MOSTAFA GROUP HOLDING ”TMG HOLDING” (S.A.E) as 

of 31 December 2007, we did not note any material adjustment that should be made to the consolidated financial statements to conform 

to the Egyptian Accounting Standards. 

Cairo: 3 March 2008 

84-85 

Translation of financial statements 

originally issued in Arabic

Consolidated Proforma Balance Sheet 

31 December 2007 


originally issued in Arabic 

Notes 2007 

LE 

ASSETS 

Long term assets 

Property and equipment - Net (3-3&4) 2,555,349,521 

Projects under constructions (3-4&5) 284,578,009 

Goodwill (6) 16,579,416,128 

Available for sale investments (3-5&7) 15,707,930 

Investments in associates (3-5&8) 33,707,750 

Long term notes receivables (10) 7,832,032,472 

Long term constructions work in progress (11) 4,754,403,735 

Total Long term assets 32,055,195,545 

Current assets 

Finished units (12) 12,382,134 

Constructions work in progress (11) 3,979,198,269 

Inventory - Net (3-6&13) 22,203,776 

Short term accounts and notes receivables (10) 1,730,606,871 

Prepayments and other debit balances (3-7&14) 716,382,809 

Available for sale investments (3-5&7) 65,853,609 

Trading investments (3-5&9) 909,614,313 

Cash on hand and at banks (3-8&15) 3,489,987,203 

Total current assets 10,926,228,958 

Current liabilities 

Provisions (3-10&16) 5,988,201 

Banks overdraft (3-18&15) 51,836,987 

Accounts and notes payable (17) 301,849,083 

Current portion of loans and facilities (3-18&21) 357,115,674 

Customers down payment (18) 2,039,458,162 

Other credit balances (3-9&19) 1,068,771,036 

Total current liabilities 3,825,019,143 

WORKING CAPITAL 7,101,209,815 

TOTAL INVESTMENTS 39,156,405,360 

Financed as follows: 

Equity 

Issued and paid up capital (20) 20,302,035,500 

Share premium (20) 158,119,298 

General reserves (25) 25,747,613 

Treasury stocks (3,009,297) 

Profit for the period 1,340,979,009 

TOTAL EQUITY 21,823,872,123 

Minority interest 2,266,490,377 

Long term liabilities 

Loans and facilities (21) 1,706,925,363 

Long term liabilities (22) 13,336,806,163 

Notes payable-long term (22) 18,977,755 

Deferred tax liability (26) 3,333,579 

Total long term-liabilities 15,066,042,860 

Total finance of equity and long term Liabilities 39,156,405,360 

Chairman Financial Directors Auditors 

Hesham Talaat Mostafa Ghaleb A. Fayed Emad Hafez Ragheb Magdy Hashish

Consolidated Proforma Income Statement 

For the period from 1 January 2007 to 31 December 2007 

Financial Directors Chairman 

Ghaleb A. Fayed Hesham Talaat Mostafa 

- The accompanying notes from (1) to (29) are an integral part of these consolidated proforma financial statements. 

86-87 



Notes 2007 

LE 

Revenue (3-11&23) 1,875,717,794 

Cost of Revenue (3-20&23) (1,025,067,064) 

GROSS PROFIT 850,650,730 

Selling and marketing expenses (3-20) (139,130,991) 

General and administrative expenses (3-20) (127,851,575) 

Financing expenses (13,715,825) 

Credit interest 78,292,239 

Other income 40,620,642 

Investment income 627,125 

Income from treasury stocks 10,599,063 

Capital gain 989,331 

Gain on sale of investments 573,453,970 

Net fair value of holding company in share holders of associates affiliates 501,536,713 

Net change in the market value for the investments 10,584,241 

Foreign exchange (Losses) (3,459,746) 

PROFIT BEFORE TAX 1,783,195,917 

Income tax (44,431,110) 

Deferred tax expense (1,448,118) 

PERIOD PROFIT AFTER TAX 1,737,316,689 

Minority interest (396,337,680) 

NET PROFIT FOR THE PERIOD 1,340,979,009 

Earnings per share for the period (24) 0,66

Consolidated Proforma Statement of Changes In Equity 

For the period from 1 January 2007 to 31 December 2007 

Share Share General Retained Treasury Total 

Capital premium reserves earnings shares 

LE LE LE LE LE LE 

Opening Balance 6,000,000 - - - - 6,000,000 

Profit for the period - - - 1,340,979,009 - 1,340,979,009 

General reserves - - 25,747,613 - - 25,747,613 

Issue of share capital 20,296,035,500 - - - - 20,296,035,500 

Share Premium - 158,119,298 - - - 158,119,298 

Treasury shares - - - - (3,009,297) (3,009,297) 

Balance At 31 December 2007 20,302,035,500 158,119,298 25,747,613 1,341,337,055 (3,009,297) 21,823,872,123 




Consolidated Proforma Cash Flow Statement 

For the Period from 1 January 2007 to 31 December 2007 

Notes 2007 

LE 

CASH FLOWS FROM OPERATING ACTIVITIES 

Profit for the year 1,340,979,009 

Adjustments to reconcile net profit to cash flows 

from operating activities: 

Depreciation 58,500,067 

Change in market value for investments (10,584,241) 

Income tax 45,879,228 

Cash from operations before working capital changes: 1,434,774,063 

(Increase) in finished units inventory (12,382,134) 

(Increase) in constructions work (8,733,602,004) 

(Increase) in inventory (22,203,776) 

(Increase) in short term accounts and notes receivables (1,730,606,871) 

(Increase) in long term accounts and notes receivables (7,832,032,472) 

(Increase) in prepayments and other debit balances (716,382,809) 

(Increase) in available for sale investments (81,561,539) 

(Increase) in investments in associates (33,707,750) 

(Increase) in available for trading investments (899,030,071) 

Increase in provisions 5,988,201 

Increase in short term accounts and notes payable 301,849,083 

Increase in long term notes payable 18,977,755 

Increase in current portion of loans and facilities 357,115,674 

Increase in customers down payment 2,039,458,162 

Increase in other credit balances 1,022,891,807 

Net cash from operating activities (14,880,454,681) 

CASH FLOWS FROM INVESTING ACTIVITIES 

Purchase of property and equipment and constructions work (2,898,427,597) 

Purchase of investments (16,579,416,128) 

Net cash (used in )investing activities (19,477,843,725) 

CASH FLOWS FROM FINANCING ACTIVITIES 

Cash proceeds from issuing shares 20,302,035,500 

Cash proceeds from premium shares 158,119,298 

Increase in minority shareholders 2,266,490,377 

Purchase of treasury shares (3,009,297) 

Reserves 25,747,613 

Cash received from loans and facilities 1,706,925,363 

Cash received from long term liabilities 13,340,139,742 

Net cash from financing activities 37,796,448,596 

INCREASE IN CASH AND CASH EQUIVALENTS 3,438,150,190 

Cash and cash equivalents at the beginning of the period - 

CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD (15) 3,438,150,190 


88-89 



NOTES TO THE CONSOLIDATED PROFORMA FINANCIAL STATEMENTS 


1- Background 

Talaat Mostafa Group Holding S.A.E. was established on 13 February 

2007 and registered in Egypt under Commercial Registration 

numbered 187397 by date 3 April 2007 under the provisions of 

law 95 of 1992 and its executive regulations. 

The main objective of the Company is participating in the 

incorporation of shareholding companies or participating in the 

capital increase of those companies. 

2- Scope of the Consilidated Proforma Financial Statements 

A- The consolidated proforma financial statements include the 

subsidiaries, that Talaat Mostafa group holding owns more than 

50% of their issued capital, as follow: 

Shares 

participation 

Arab company for projects and urban development 99.9% 

Alexandria for real estate Company 98.6% 

San Stefano for real estate Company 98.34% 

The company owns indirect 27.32 % of San Stefano for real estate 

through its subsidiaries (Arab company for projects and urban 

development, Alexandria for real estate and Alexandria for urban 

projects. 

B- Proforma adjustments and the basis of preparing the 

consolidated proforma financial statements Proforma adjustments- 

Business combination. 

The financial statements include assets, liabilities and the results 

of the company and it’s subsidiaries that mentioned in note (2A) 

above assuming that the company acquire it.s share in the 

subsidiaries from January 1, 2007, taking into consideration that 

the actual acquisition date was October 28, 2007. 

3- Accounting Policies 

The main accounting policies that used in preparing the 

consolidated proforma financial statements are; 

3-1 Basis of consolidating the financial statements 

• The financial statements of the holding company and the 

subsidiaries have been prepared according to cost method 

except for some investments that have been evaluated with 

fair value in accordance to the Egyptian Accounting Standards 

and the prevailing laws and local regulations and note (2b) 

above. 

• Similar assets, liabilities, revenues and expenses items were 

consolidated in the holding company and its subsidiaries after 

eliminating the following: 

a- The Holding Company’s cost of investment in every subsidiary 

company against decreased it from the equity in the subsidiary 

company at the acquisition date and record the different between 

the investment cost and the holding company share in the book 

value of the subsidiaries equity as goodwill. 



On yearly basis at the balance sheet date , goodwill is to be 

revaluated to decide wither to reduce the value of the goodwill 

in case of the decrease of the holding company fair value in the 

subsidiaries equity and record the decrease in the consolidated 

proforma income statement. 

b- The Inter-company transactions among the companies of the 

group especially: 

- The current accounts among the companies. 

- Notes Receivable /Payable among the companies. 

c- The sales, expenditures, revenue and dividends among the 

companies of the group during the year 

d- The unrealized profit at the consolidated balance sheet date 

among the companies of the group, which might appear in the 

assets balances in the consolidated proforma balance sheet date 

as inventory and fixed assets. 

e- Any differences between debit and credit balances resulting 

from the inter-companies transactions, which were recorded in 

one company and not in the other company’s records, were 

eliminated. 

f- The minority interest appears as a separate caption in the 

consolidated proforma financial statements as a percentage 

calculated on the basis of 

the ownership of the holding company in the subsidiaries. 

3-2 Foreign Currency Translations 

Transactions in foreign currencies are recorded at the rate prevailing 

at the date of the transaction. Monetary assets and liabilities 

denominated in foreign currencies are retranslated at the rate of 

exchange prevailing at the balance sheet date. All differences are 

taken to the income statement.Non monetary assets and non 

monetary liabilities valued at historical cost denominated in foreign 

currencies are retranslated at the rate of exchange ruling at the 

date of transaction. 

3-3 Property, plant and equipment 

a- Property, plant and equipment is stated at cost less accumulated 

depreciation and any impairment in value. Land is not depreciated. 

The cost includes all direct costs related to the acquiring of the 

asset, regarding the built internally assets , the cost includes the 

cost of materials, direct labour and all other direct costs that is 

required until it is ready to be used and also the cost of elimination 

the asset and fix the construction site. 

b- Depreciation is calculated on a straight line basis over the 

estimated useful lives of the assets as follows:



Buildings & constructions 20 years 

Motor Vehicles 5 years 

Tools & equipments 8 years 

Furniture and other assets 8-10 years 

Computers 8 years 

The carrying values of property, plant and equipment are reviewed 

for impairment when events or changes in circumstances indicate 

the carrying value may not be recoverable. If any such indication 

exists and where the carrying values exceed the estimated 

recoverable amount, the assets are written down to their 

recoverable amount, being the higher of their fair value less costs 

to sell and their value in use. 

3-4 Expenditure incurred to replace a component of an item of 

property, plant and equipment that is accounted for separately is 

capitalised and the carrying amount of the component that is 

replaced is written off. Other subsequent expenditure is capitalised 

only when it increases future economic benefits of the related item 

of property, plant and equipment. All other expenditure is recognised 

in the income statement as the expense is incurred. 

3-5 Reclassify the real estate investments 

Real estates that built for future use is recorded as real estate 

investments under fixed assets class till it is finished, and then remeasure 

its fair value, recognising any profit or loss in the income 

statement. 

The real estate that transferred from real estate occupied by the 

company to real estate investments to be re-measured with the 

fair value and reclassified as real estate investments. 

The profit results from the re-measurement to be recognised in 

the equity and any loss to be recognised in the income statement. 

3-6 Project under construction: 

Projects under construction represent the amounts that are paid 

for the purpose of constructing or purchasing fixed assets until it 

is ready to be used in the operation, upon which it is transferred 

to fixed assets. Projects under construction are valued at cost. 

3-7 Investments 

Investments in associates 

Investments in associates are accounted for using the Equity 

method except for when investment are classified as available for 

sale according to the Egyptian accounting standards No. 32 None 

current assets held for sale and discontinued operations, these 

associates companies are those companies which the company 

has a major influence and which are not subsidiaries or joint 

venture. Investments in associates are recorded in the Balance 

sheet with cost in addition to company share of any changes in 

the net assets of associates company after deducting any 

impairment losses, the company’s income statement reflect its 

share in the result of associates companies. 

These investment include company’s share in the profit of 

subsidiaries according to their financial statements which ratified 

90-91 



by their auditors and these investments are diluted by company 

share form the dividends declared according to investee's General 

Assembly Meeting decisions. 

The losses or revenues results from the transactions between the 

company and its affiliates are eliminated in the range of the 

company’s share in the affiliated companies 

Available-for-sale investments 

Available-for-sale investments are recognised and derecognised, 

on a trade date basis, when the Company becomes, or ceases to 

be, a party to the contractual provisions of the instrument. They 

are included in non current assets unless management intends to 

dispose of the investments within 12 months of the balance sheet 

date. 

Investments designated as available-for-sale investments are initially 

recorded at cost (except for non listed investments in the capital 

exchange market and subsequently measured at fair value. Changes 

in fair value are reported as a separate component of equity. Upon 

elimination of investments, the previously reported as “cumulative 

changes in fair value” within equity is to be included in the income 

statement for the period, except for impairments loss , and for non 

listed investments is to be recorded at cost less impairment loss. 

Financial investments held for trading 

Financial investments are classified as held for trading if they are 

acquired for the purpose of selling in the near term. They are 

measured at fair value, any gains or losses on investments held for 

trading are recognized in profit and loss. 

Investments in Bonds held to maturity 

Investments in Bonds held to maturity with fixed or determinable 

payments that are not quoted in an active market, are carried at 

amortized cost. Investment in bonds is classified as non current 

assets except for the bonds that due in the next financial period 

which will be classified as current assets. 

3-8 Inventories 

Inventories are stated at the lower of cost or net realizable value. 

Cost is determined as follows: 

Raw materials, spare parts, supplies and packaging materials: at 

cost using the weighted average method. 

Work in Progress and Finished goods Inventory – supplies direct 

cost and wages addition to indirect expenses according to Normal 

activate level. 

Net excepted value to be determined based on the estimated 

sales price less additional expected cost it is built or sold 

3-9 Accounts receivable 

Accounts receivable are stated at original invoice amount less a 

provision for any uncollectible amounts. An estimate for doubtful 

debts is made when collection of the full amount is no longer 

probable. Bad debts are written off when there is no possibility of 

recovery.



3-10 Accounts payable and accruals 

Liabilities are recognised for amounts to be paid in the future for 

goods or services received, whether billed by the supplier or not. 

3-11 Cash and Cash Equivalents 

Cash and cash equivalents consist of cash in hand, bank balances, 

and short-term deposits with an original maturity of three months 

or less, net of outstanding bank overdrafts if any. 

3-12 Provisions 

Provisions are recognised when the Company has an obligation 

(legal or constructive) arising from a past event, and the costs to 

settle the obligation are both probable and able to be reliably 

measured. Provisions are evaluated in each balance sheet date 

and adjusted to provide the most reasonable estimate. 

3-13 Revenue recognition 

Revenue from sales is recognised when the significant risks and 

rewards of ownership have passed to the buyer and the amount 

of revenue can be measured reliably. 

The revenue from services provided recorded when estimated the 

result transaction from completion transaction percentage in 

Balance Sheet date. 

Revenue from share profit recorded when there is right to receive 

it. 

3-14 Legal reserve 

According to the Company’s article of association, 5% of the net 

profits of the year is to be transferred to the legal reserve until this 

reserve reaches 50 % of the issued capital. The reserve is used upon 

a decision from the General Assembly Meeting based on the 

proposal of the Board Of Directors 

3-15 Impairment and uncollectability of financial assets 

The Company regularly assesses whether there is an indication 

that an asset could be impaired. If any such indication exists, the 

recoverable amount of the asset is compared with its carrying 

amount, and when the carrying amount of the asset exceeds its 

recoverable amount, the asset is considered impaired and is 

written down to its recoverable amount. 

A previously recognized impairment loss is reversed when there 

is a change in the recoverable amount of the asset to the extent 

of the previously recognized loss. 

3-16 Accounting estimates 

The preparation of financial statements in accordance with Egyptian 

Accounting Standards requires management to make estimates 

and assumptions that affect the reported amounts of assets, 

liabilities, revenues and expenses during the financial years. Actual 

results could differ from these estimates. 

3-17 Income tax 

Taxation is provided in accordance with Egyptian fiscal regulations. 



Deferred income tax is provided, using the liability method, on all 

temporary differences at the balance sheet date between the tax 

bases of assets and liabilities and their carrying amounts. 

Deferred income tax assets and liabilities are measured at the tax 

rates that are expected to apply to the period when the asset is 

realised or the liability is settled, based on laws that have been 

enacted at the balance sheet date. 

Deferred income tax assets are recognised for all deductible 

temporary differences and carry-forward of unused tax assets and 

unused tax losses to the extent that it is probable that taxable 

profit will be available against which the deductible temporary 

differences and the carry-forward of unused tax assets and unused 

tax losses can be utilised.. 

3-18 Cash flow statement 

The cash flow statement is prepared using the indirect method, 

for the purpose of preparing the cash flow statements , the cash 

and cash equivalent include cash on hand , cash at bank , short 

term deposits , treasury bills with maturity date three months or 

less deducting the bank over draft – if any. 

3-19 Related party transactions 

Related party transactions performed by the Company within its 

normal business transactions are recorded based on the conditions 

set by the board of directors. 

3-20 Borrowing 

Borrowings are initially recognized at the value of the consideration 

received. Amounts maturing within one year are classified as current 

liabilities, unless the Company has the right to postpone the 

settlement for a period exceeding twelve months after the balance 

sheet date, then the loan balance should be classified as long term 

liabilities 

3-21 Borrowing costs 

Borrowing costs are recorded in the statement of income as 

financing expenses except the borrowing costs directly related to 

the acquisition, construction or production of a qualifying assets 

which is included as part of the cost of the asset. 

3-22 Expenses 

All expenses including operating expenses, general and 

administrative expenses and other expenses are recognized and 

charged to the statement of income in the financial year in which 

these expenses were incurred.



4- Property and Equipment - Net 

5- Projects Under Constructions 

31/12/2007 

LE 

Tahran building 15,315,724 

Computers and software 3,883,703 

Villa ( Al rehab ) 3,130,245 

Fixtures 2,373,015 

Al Nile hotel 259,875,322 

284,578,009 

6- Goodwill 

31/12/2007 

LE 

Arab Company for Projects and Urban Development 12,838,863,316 

Alexandria for Real Estate investment 3,213,291,698 

San Stefano for Real Estate Investment 479,535,364 

Alexandria for Urban Projects 47,725,750 

16,579,418,128 

92-93 



Buildings Motor Tools Furniture Marine Computers Total 

& Vehicles & Equipments & Equipment 

Constructions Fixtures 

LE LE LE LE LE LE LE 

Cost 

At 1 January 2007 1,220,698,732 34,502,987 13,359,977 318,249,704 4,799,199 5,150,612 1,596,761,211 

Additions 1,058,197,671 8,190,433 3,689,051 85,112,057 201,340 3,170,694 1,158,561,246 

Disposals (66,090) (1,301,460) - (379,660) - - (1,747,210) 

At 31 December 2007 2,278,830,313 41,391,960 17,049,028 402,982,101 5,000,539 8,321,306 2,753,575,247 

Accumulated depreciation 

At 1 January 2007 (50,428,842) (15,251,299) (2,905,045) (69,944,647) (537,911) (1,788,266) (140,856,010) 

Depreciation charge (21,618,379) (6,796,085) (1,360,050) (27,302,904) (606,769) (815,880) (58,500,067) 

Disposals 13,548 1,054,924 - 61,879 - - 1,130,351 

At 31 December 2007 (72,033,673) (20,992,460) (4,265,095) (97,185,672) (1,144,680) (2,604,146) (198,225,726) 

Net carrying amount 

At 31 December 2007 2,206,796,640 20,399,500 12,783,933 305,796,429 3,855,859 5,717,160 2,555,349,521 

7- Available for Sale Investments 

31/12/2007 

LE 

Current Investments 

Free Zone Industry Area East Port Saied 16,287 

Egyptian International Medical Insurance 250,000 

Egyptian Company for Marketing and Distribution 500,000 

Suez Cement 581,700 

Arab African Bank Bonds 623,222 

Alexandria for Mineral Oil 659,439 

Al Delta for Sugar 1,621,971 

Housing and Development Bank 1,903,043 

Sinaa Cement 2,451,865 

Canal Maritime agency 2,610,000 

Mobinil 2,868,180 

Misr El Gedida for Housing and Development 2,969,928 

CIB 3,074,295 

Faisal Islamic Bank 3,282,904 

Orascom Telecom 3,334,640 

Elnaeem for Holding Investments 4,489,189 

Orascom for Constructions 5,578,950 

Financial Group Hermes 6,860,880 

6 of October Company for Development and Investments 10,927,116 

El Tayseer for Real Estate Finance Company 

Non-Current Investments 

11,250,000 

Housing Development Bank Securities 57,930 

El Tameer for Real Estate Finance Company 6,650,000 

Other Investments 9,000,000 

Total 81,561,539 

Current Investments (65,853,609) 

Long Term Investments 15,707,930



8- Investments in Associates 

Shares 31/12/2007 

participation LE 

Arab Egyptian for entertainment projects 50% 125,000 

Alexandria for projects management 32.5% 1,027,000 

Nile Besfour Company 31.77% 10,028,072 

Alexandria for tourism projects 24.25% 477,678 

Areez arab limited company 50% 22,050,000 

33,707,750 

9- Trading Investments 

31/12/2007 

LE 

Investments fund 13,000,048 

Huros investments fund 16,950,000 

Themar investments fund 674,553,037 

Export development bank investment fund 49,999,932 

Dune grosses overseas 80,094,663 

Antalis business corp 75,000,000 

Egyptians cables investments company 16,633 

909,614,313 

11- Constructions Work in Progress 

10- Accounts and Notes Receivables 

Short term Long term TOTAL 

31/12/2007 

LE 

Notes receivable 1,528,943,355 7,832,032,472 9,360,975,827 

Accounts receivable 201,663,516 - 201,663,516 

1,730,606,871 7,832,032,472 9,562,639,343 

Project Land Consultations Consultations Consultations Technical Financing Licenses Indirect Current Non Current Total 

and designs work of Managenent costs and other costs portion portion 

Alexandria and governments 

governorate Supervision fees 

costs 

LE LE LE LE LE LE LE LE LE LE LE 

Arab for projects and 2,164,282,270 171,500,090 1,211,189,577 - 30,527,533 - 75,719,378 1,129,698,835 79,482,687 4,703,434,996 4,782,917,683 

urban development 

San Stefano For Real 139,430,939 88,506,440 916,277,154 5,506,726 - 261,565,870 2,785,862 185,211,848 1,599,284,840 - 1,599,284,839 

Estate investment 

Alexandria For Real 584,197,060 124,051,241 1,286,627,403 - - 186,835,493 - 169,688,285 2,300,430,742 50,968,739 2,351,399,482 


2,887,910,269 384,057,771 3,414,094,134 5,506,726 30,527,533 448,401,363 78,505,240 1,484,598,968 3,979,198,269 4,754,403,735 8,733,602,004 

12- Finished Units: 

Balance for this item is LE 12,382,134 represent in the finished units 

which return to the clients and available for sale. 

13- Inventory – Net 

31/12/2007 

LE 

Equipment 37,462,140 

Furniture 8,053,890 

(Loss) Utilize the hotel Inventory (23,312,254) 

22,203,776 

14- Prepayment and other Debit Balances 



31/12/2007 

LE 

Contractors and accounts payable- down 237,347,701 

payment and tashwenat 

Received from abroad 10,609,524 

Transfers - cheques 23,690,941 

Accrued revenue 18,878,797 

Current accounts - Hotels 83,727,591 

Related parties ( Note 27 ) 54,658,456 

Receivables ?sale of investments 255,911,977 

Other debit balances 31,557,822 

716,382,809



15- Cash and Cash Equivalents 

Local Foreign TOTAL 

currency currency 31/12/2007 

LE 

Time deposits 810,862,599 200,632,862 1,011,495,461 

Banks current accounts 50,521,660 151,467 50,673,153 

Cash on hand 10,058,382 - 10,058,382 

Treasury bills 2,410,334,761 - 2,410,334,761 

Cheques under collection 7,425,446 - 7,425,446 

3,289,202,848 200,784,329 3,489,987,177 

For cash flow preparation, cash and cash equivalents consist of 

31/12/2007 

LE 

Cash on hand and at banks 3,489,987,177 

Banks over draft (51,836,987) 

3,438,150,190 

16- Provisions 

31/12/2007 

LE 

Beginning Balance 5,988,201 

Used during the year - 

Ended Balance 5,988,201 

17- Accounts and Nots Payables 

31/12/2007 

LE 

Accounts payable and contractors 210,956,744 

Related parties ( Note 27 ) 17,528,531 

Notes payable 73,363,808 

301,849,083 

18- Customers Down Payment 

31/12/2007 

LE 

Customers down payment ( Al Rehab Project ) 346,641,269 

Customers down payment ( Nile Plaza Project ) 118,905,307 

Customers down payment ( Sharm El Sheikh Project ) 4,719,942 

Customers down payment ( San Stefano Project ) 1,229,678,655 

Customers down payment ( Al Rabowa Project ) 339,512,989 

2,039,458,162 

94-95 

19- Other Credit Balances 



31/12/2007 

LE 

Dividend Payable 5,032,556 

Retentions Payable 157,394,623 

Accrued Salaries and Expenses 3,348,400 

New Urban Authority 4,726,851 

Subscription of the club 175,493,905 

Accrued Consultant Fees 16,343,983 

Club contribution for annual subscription renewal 16,678,071 

Other Creditors 488,851,138 

Treasury Stocks - Due to employees 37,600,000 

Hotels Current Account ? Renewal and Replacement 12,646,487 

Units Insurance 150,655,022 

1,068,771,036 

20- Share Capital 

The company’s authorized capital amounted to LE 50,000,000 and 

the issued and paid up capital LE 6,000,000 divided over 600,000 

share of LE 10 par value each. 

According to the Extraordinary General Assembly Meeting dated 

6, October 2007, the company’s authorized capital was amended 

to be LE 30,000,000,000 and the issued and paid capital was 

amended to be LE 18,152, 035,500 divided over 1,815,203,550 share 

of LE 10 par value each. Through share swap with the subsidiaries 

companies. 

According to the Extra Ordinary General Assembly Meeting dated 

28 October 2007, the company’s issued and paid up capital was 

increased to be LE 20,302,035,500 divided over 2,030,203,550 shares. 

The increase was paid and amounted to LE 2,150,000,000 and the 

premium share amounted to LE 1.6 per share by total amount LE 

344,000,000. 

- Share premium 

Premium share amounted to LE 1.6 per share by total amount LE 

344,000,000 and an amount of LE 185,880,702 was used to cover 

the IPO expenses. Accordingly the net balance of the share premium 

is LE 158,119,298. 

21- Loans and Facilities 

The balance as of the financial statement date Amounted to LE 

2,064,041,037 comprised as follow : 


31/12/2007 

Facilities * 98,625,259 35,600,000 134,225,259 

Loans * 258,490,415 1,671,325,363 1,929,815,778 

357,115,674 1,706,925,363 2,064,041,037 

* Facilities and loan’s maturity instalments within a year from issuing 

financial statements were recorded as a part of current liabilities 

noting that it is secured by commercial and securities. 

LE



22- Long Term Liabilities 

31/12/2007 

LE 

Long term notes payable 18,977,755 

18,977,755 

Customer down payment ( Madinaty Project ) 8,264,992,594 

Customer down payment ( Al Rehab Project ) 1,700,877,729 

Customer down payment 1,238,086,236 

( Al Rehab Extension Project ) 

Urban authority 2,132,849,604 

13,336,806,163 

13,355,783,918 

23- Sales and Cost of Sales 

31/12/2007 

LE 

- Revenue from sold units 1,598,606,173 

- Net revenue from hotel operation 228,624,500 

- Services revenues 48,487,121 

1,875,717,794 

- Operation Cost 

- Cost of Sold Units 997,858,624 

- Cost of Sold Services 27,208,440 

1,025,067,064 

24- Earnings Per Share 

Earnings per share are LE .66 according to the following: 

31/12/2007 

LE 

Net profit for the period 1,340,979,009 

Weighted average number of shares 2,030,203,550 

Earnings per share ,66 

25- Resreves 

General Reserve: 

According to the Extra ordinary General Assembly Meeting dated 

6, October 2007, the different results from shares swap of the 

company with the subsidiaries amounted LE 25,747,613 was 

transferred to general reserve. 

26- Deferred Tax Liability 

Deferred tax liability as of 31 December 2007 amounted to LE 

3,333,579 represents the depreciation for fixed assets and related 

to difference between tax depreciation and accounting depreciation 

as follows: 

31/12/2007 

LE 

Fixed assets 3,333,579 

3,333,579 

27- Related Party Transactions: 

To accomplish the company’s objectives, the company deals with 

some related companies with the same terms of the related parties 



It delegates some assignments in El Rehab City’s project to them. 

It may as well pay off or settle some balances on behalf of them. 

These transactions balances appeared in the Assets and Liabilities 

in the Balance Sheet after the approval of the General Assembly of 

the Company. 

Alexandria Company for construction is the primary contractor for 

the companies' projects under the contracts signed by the 

companies. 

Al Basatin Company for Gardening and Landscaping performs the 

job of gardening and landscape for the Rehab project under the 

contract signed with the company. 

Prepayments Credit Transaction 

(debit ) balances type 

Alexandria for Constructions 53,649,352 16,764,035 Contractor 


Al-Basatin Company for 

Gardening and Landscaping 1,009,104 764,496 Contractor 

54,658,456 17,528,531 

28-Tax Situation 

The company is subject to Tax Law 91 for 2005, because the 

Company started it’s activity in April 2007, the tax returns not yet 

submitted. 

29-Financial Instruments and Risk Management 

The Company’s financial instruments are represented in financial 

assets and financial liabilities. The financial assets include cash on 

hand and at banks, account receivable, debtors and other debit 

balances. The financial liabilities include banks overdrafts, accounts 

payable, creditors and other credit balances. 

The significant accounting policies applied for the recognition and 

measurement of the above mentioned financial assets and liabilities 

and the related income and expenses. 

Herein under the significant risk related to the financial instruments 

as well as the significant policies and procedures that applied by 

the company to reduce those risks. 

A- Credit Risk 

Credit risk represents the risk of default of the customers from not 

paying the amounts due, this risk is limited due to the expand 

number of customers that the company deals with and having 

sufficient guarantees to reduce the risk of default a customer , also 

follow up the customers through specific departments. 

B- Interest Rate Risk 

The company mitigates the impact of the interest rate changes 

on its operational results and the value of its financial assets and 

liabilities. 

C- Foreign Currency Risk 

The foreign currency risk is the risk that the value of the financial 

assets and liabilities and the related cash in flows, and out flows 

in foreign currencies will fluctuate due to changes in foreign 

currency exchange rates, this risk is limited as most of the company’s 

transactions are in local currency.

AUDITORS' REPORT TO THE SHAREHOLDERS OF 

TALAAT MOSTAFA GROUP HOLDING "TMG HOLDING" S.A.E 

We have audited the accompanying consolidated financial statements of Talaat Mostafa Group Holding “TMG Holding” “S.A.E” represented 

in the Consolidated Balance Sheet as of 31 December 2007 and the related consolidated statements of income, changes in shareholders’ 

equity and cash flows for the period from 3 April 2007 (inception date) to 31 December 2007. These financial statements are the 

responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our 

audit. 

We conducted our audit in accordance with the Egyptian Standards on Auditing and applicable Egyptian laws. The Egyptian Standards 

on Auditing require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial 

statements are free of material misstatement. An audit includes examining on a test basis, evidence supporting the amounts and 

disclosures in the consolidated financial statements. An audit also includes assessing the accounting principles used and significant 

estimates made by management, as well as evaluating the overall consolidated financial statement presentation. We obtained all 

information and disclosures, which we considered necessary for the purpose of our audit. We believe that our audit provides a reasonable 

basis for our opinion on the consolidated financial statements. 

In our opinion, the consolidated financial statements referred to above, and the notes attached present fairly in all material respects, the 

consolidated financial position of the Company for the period from 3 April 2007 (inception date) to 31 December 2007, and the results 

of its operations and its cash flows, for the period then ended in conformity with the Egyptian Accounting Standards, taking into 

consideration what was mentioned it the notes to the consolidated financial statements and the related Egyptian applicable laws and 

regulations. 

Cairo: 28 February 2008 

96-97 



Consolidated Balance Sheet 




Notes 2007 

LE 

ASSETS 

Non-Current Assets 

Property and Equipment (3-3,4) 2,555,349,521 

Projects under Constructions (3-6,5) 284,578,009 

Goodwill (6) 15,001,718,712 

Available for Sale Investments (3-7,7) 15,707,930 

Investments in Associates (3-7,8) 33,707,750 

Notes Receivables (10) 7,832,032,472 

Construction Work (11) 4,754,403,735 

30,477,498,129 

Current Assets 

Finished Units (3-5,12) 12,382,134 

Under Construction Work (11) 3,979,198,269 

Inventory (Net) (3-8,13) 22,203,776 

Accounts and Notes Receivable - Short Term (10 1,730,606,871 

Prepayments and Other Debit Balances (3-9,14) 716,382,809 

Available for Sale Investments (7) 65,853,609 

Trading Investments (3-7,9) 909,614,313 

Cash on Hand and at Banks (3-11,15) 3,489,987,177 

Total current assets 10,926,228,958 

Current Liabilities 

Provisions (3-12,16) 5,988,201 

Banks Overdraft (3-20,15) 51,,836,987 

Creditors and Short Term Notes Payable (17) 301,849,083 

Current Portion of Loans and Facilities (3-20,20) 357,115,674 

Customers Down Payment (18) 2,039,458,162 

Other Credit Balances (3-10,19) 1,068,771,036 

Total Current Liabilities 3,825,019,143 

WORKING CAPITAL 7,101,209,815 

TOTAL INVESTMENTS 37,578,707,944 

Financed as follows: 

Issued and Paid up Capital (20) 20,302,035,500 

Share Premium (20) 158,119,298 

General Reserves (25) 25,747,613 

Treasury Stocks (3,009,297) 

Profit for the year 195,395,347 

TOTAL EQUITY 20,678,288,461 

Minority Interest 1,834,376,623 

Long Term Liabilities 

Loans and Facilities (3-20,21) 1,706,925,363 

Long Term Liabilities (22) 13,336,806,163 

Notes Payable 18,977,755 

Deferred Tax Liability (3-17,26) 3,333,579 

Total Long Term Liabilities 15,066,042,860 

Total Equity and Long Term Liabilities 37,578,707,944 

Chairman Financial Directors Auditors 

Hesham Talaat Mostafa Ghaleb A. Fayed Emad Hafez Ragheb Magdy Hashish

Consolidated Income Statement 

For the period from 3 April 2007 to 31 December 2007 

Financial Directors Chairman 

Ghaleb A. Fayed Hesham Talaat Mostafa 


98-99 



Notes 2007 

LE 

Revenue (3-13) 431,413,137 

Cost of Revenue (3-22) (175,446,620) 

GROSS PROFIT 255,966,517 

Marketing and Sales Expenses (3-22) (66,798,256) 

General and Administrative Expenses (3-22) (4,326,206) 

Finance Expenses (16,899,917) 

Credit Interest 19,926,251 

Other Income 9,846,378 

Investment Income (48,875) 

Income from Treasury Stocks 5,374,044 

Capital Gain 52,710 

(Loss) on Sale of Investment (49,825,776) 

Net Change in the Market Value of Investments 5,175,020 

Gain from Foreign Exchange Differences 2,022,690 

PROFIT BEFORE TAX 160,464,580 

Income Tax Expense (525,303) 

Deferred Tax Expense (320,004) 

NET PROFIT FOR THE YEAR AFTER TAX 159,619,273 

Minority Interest 35,776,074 

NET PROFIT FOR THE YEAR 195,395,347 

Earnings Per Share (24) 0.61

Consolidated Statement of Changes in Equity 


Share Share General Retained Treasury Total 

Capital premium reserves earnings shares 

LE LE LE LE LE LE 

Balance at 3 April 2007 6,000,000 - - - - 6,000,000 

Profit for the period - - - 195,395,347 - 195,395,347 

General Reserves - - 25,747,613 - - 25,747,613 

Issue of Share Capital 20,296,035,500 - - - - 20,296,035,500 

Share Premium - 158,119,298 - - - 158,119,298 

Treasury Shares - - - - (3,009,297) (3,009,297) 

Balance at 31 December 2007 20,302,035,500 158,119,298 25,747,613 195,395,347 (3,009,297) 20,678,288,461 




Consolidated Cash Flow Statement 


Notes 2007 

LE 

OPERATING ACTIVITIES 

Profit for the year 195,395,347 

Adjustments to reconcile net income (loss) to cash flows 

from operating activities 

Depreciation 9,816,023 

Change in Market Value for Investments (5,175,020) 

Income Tax 845,307 

Operating profit before changes in working capital: 200,881,657 

(Increase) in Inventory (22,203,776) 

(Increase) in Finished Units (12,382,134) 

(Increase) in Development Properties (8,733,602,004) 

(Increase) in Short Term Accounts and Notes Receivables (1,730,606,871) 

(Increase) in Long Term Accounts and Notes Receivable (7,832,032,472) 

(Increase) in Prepayments and Other Debit Balances (716,382,809) 

(Increase) in Available for Sale Investments (81,561,539 

(Increase) in Investments in Associates (33,707,750 

(Increase) in Trading Investments (904,439,295) 

Increase in Short Term Accounts and Notes Payable 301,849,083 

Increase Long Term Notes Payable 18,977,755 

Increase in Current Portion of Loans and Facilities 357,115,674 

Increase in Customers Down Payment 2,039,458,162 

Increase in Other Credit Balances 1,067,925,727 

Increase in Provisions 5,988,201 

Net Cash from Operating Activities (16,074,722,390) 

INVESTING ACTIVITIES 

Purchase of Property and Equipment and Construction Work (2,849,743,550) 

Purchase of Investments (15,001,718,712) 

Net Cash used in Investing Activities (17,851,462,262) 

FINANCING ACTIVITIES 

Cash Proceeds from Issuing Shares 20,302,035,500 

Cash Proceeds from Premium Shares 158,119,298 

Increase in Minority Shareholders 1,834,376,623 

Purchase of Treasury Shares (3,009,297) 

Reserves 25,747,613 

Cash Received from Loans and Facilities 1,706,925,363 

Cash Received from Long Term Liabilities 13,340,139,742 

Net Cash from (used in) Financing Activities 37,364,334,842 

INCREASE/ (DECREASE) IN CASH AND CASH EQUIVALENTS 3,438,150,190 

Cash and Cash Equivalents at the beginning of the period - 

CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR 3,438,150,190 


100-101 



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 


1- Background 

Talaat Mostafa Group Holding ( S.A.E.). registered in Egypt under 

Commercial Registration numbered 187397 Under the provisions 

of law 92 of 1995 and its executive regulations in 13 February 2007. 

the company was registered in 3 April. 

The main objective of the Company is participating in the 

incorporation of shareholding companies or participating in the 

capital increase of those companies 

2- Scope of The Consolidated Financial Statements 

The consolidated financial statements include the subsidiaries, 

that Talaat Mostafa group holding owns more than 50% of their 

issued capital, as follow 

Shares 

participation 

Arab company for projects and urban development 99.9% 

Alexandria for real estate Company 98.6% 

San Stefano for real estate Company 98.34% 

The company owns indirect 27.32 % of San Stefano for real estate 

through its subsidiaries, Arab company for projects and urban 

development, Alex for real estate and Alex for Urban Projects. 

3- Accounting Policies 

The main accounting policies that used in preparing the 

consolidated financial statements are: 

3-1 Basis of consolidating the financial statements 

• The financial statements of the holding company and the 

subsidiaries have been prepared according to the cost method 

except for some investments that have been evaluated with 

fair value in accordance to the Egyptian Accounting Standards 

and the prevailing laws and local regulations 

The same accounting policies and basis that are used in 

preparing the interim financial statements. 

• Similar assets, liabilities, revenues and expenses items were 

consolidated in the holding company and its subsidiaries after 

eliminating the following: 

a- The Holding Company’s cost of investment in every subsidiary 

company against decreased it from the equity in the subsidiary 

company at the acquisition date and record the different between 

the investment cost and the holding company share in the book 

value of the subsidiaries equity as goodwill. 

On yearly basis at the balance sheet date , goodwill is to be 

revaluated to decide wither to reduce the value of the goodwill 

in case of the decrease of the holding company fair value in the 

subsidiaries equity and record the decrease in the consolidated 

income statement 

b- The Inter-company transactions among the companies of the 

group especially: 



- The current accounts among the companies. 

- Notes Receivable /Payable among the companies. 

c- The sales, expenditures, revenue and dividends among the 

companies of the group during the period. 

d- The unrealized profit at the consolidated balance sheet date 

among the companies of the group, which might appear in the 

assets balances in the consolidated balance sheet date as inventory 

and fixed assets. 

e- Any differences between debit and credit balances resulting 

from the inter-companies transactions, which 

were recorded in one company and not in the other company’s 

records, were eliminated. 

f- The minority interest appears as a separate caption in the 

consolidated financial statements as a percentage calculated on 

the basis of the ownership of the holding company in the 

subsidiaries. 

3-2 Foreign Currency Translations 

Transactions in foreign currencies are recorded at the rate prevailing 

at the date of the transaction. Monetary assets and liabilities 

denominated in foreign currencies are retranslated at the rate of 

exchange prevailing at the balance sheet date. All differences are 

taken to the income statement. Non monetary assets and non 

monetary liabilities valued at historical cost denominated in foreign 

currencies are retranslated at the rate of exchange ruling at the 

date of transaction. 

3-3 Property, plant and equipment 

a- Property, plant and equipment is stated at cost less accumulated 

depreciation and any impairment in value. Land is not depreciated. 

The cost includes all direct costs related to the acquiring of the 

asset, regarding the built internally assets , the cost includes the 

cost of materials, direct labour and all other direct costs that is 

required until it is ready to be used and also the cost of elimination 

the asset and fix the construction site. 

b- Depreciation is calculated on a straight line basis over the 

estimated useful lives of the assets as follows: 

Buildings & constructions 20 years 

Motor Vehicles 5 years 

Tools & equipments 8 years 

Furniture and other assets 8-10 years 

Computers 8 years 

The carrying values of property, plant and equipment are reviewed 

for impairment when events or changes in circumstances indicate 

the carrying value may not be recoverable. If any such indication 

exists and where the carrying values exceed the estimated 

recoverable amount, the assets are written down to their 

recoverable amount, being the higher of their fair value less costs 

to sell and their value in use.



3-4 Expenditure incurred to replace a component of an item of 

property, plant and equipment that is accounted for separately is 

capitalised and the carrying amount of the component that is 

replaced is written off. Other subsequent expenditure is capitalised 

only when it increases future economic benefits of the related 

item of property, plant and equipment. All other expenditure is 

recognised in the income statement as the expense is incurred. 

3-5 Reclassify the real estate investments 

Real estate's that built for future use is recorded as real estate 

investments under fixed assets class till it is finished, and then remeasure 

its fair value, recognising any profit or loss in the income 

statement. 

The real estate that transferred from real estate occupied by the 

company to real estate investments to be re-measured with the 

fair value and reclassified as real estate investments. 

The profit results from the re-measurement to be recognised in 

the equity and any loss to be recognised in the income statement. 

3-6 Project under construction: 

Projects under construction represent the amounts that are paid 

for the purpose of constructing or purchasing fixed assets until it 

is ready to be used in the operation, upon which it is transferred 

to fixed assets. Projects under construction are valued at cost. 

3-7 Investments 

Investments in associates 

Investments in associates are accounted for using the Equity 

method except for when investment are classified as available for 

sale according to the Egyptian accounting standards No. 32 None 

current assets held for sale and discontinued operations, these 

associates companies are those companies which the company 

has a major influence and which are not subsidiaries or joint 

venture. Investments in associates are recorded in the Balance 

sheet with cost 

In addition to company share of any changes in the net assets of 

associates company after deducting any impairment losses, the 

company’s income statement reflect its share in the result of 

associates companies. 

These investment include company’s share in the profit of 

subsidiaries according to their financial statements which ratified 

by their auditors and these investments are diluted by company 

share form the dividends declared according to investee's General 

Assembly Meeting decisions. 

The losses or revenues results from the transactions between the 

company and its affiliates are eliminated in the range of the 

company’s share in the affiliated companies 

Available-for-sale investments 

Available-for-sale investments are recognised and derecognised, 

on a trade date basis, when the Company becomes, or ceases to 

102-103 



be, a party to the contractual provisions of the instrument. They 

are included in non current assets unless management intends to 

dispose of the investments within 12 months of the balance sheet 

date. 

Investments designated as available-for-sale investments are initially 

recorded at cost (except for non listed investments in the capital 

exchange market and subsequently measured at fair value. Changes 

in fair value are reported as a separate component of equity. Upon 

elimination of investments, the previously reported as “cumulative 

changes in fair value” within equity is to be included in the income 

statement for the period, except for impairments loss , and for non 

listed investments is to be recorded at cost less impairment loss. 

Financial investments held for trading 

Financial investments are classified as held for trading if they are 

acquired for the purpose of selling in the near term. They are 

measured at fair value, any gains or losses on investments held for 

trading are recognized in profit and loss. 

Investments in Bonds held to maturity 

Investments in Bonds held to maturity with fixed or determinable 

payments that are not quoted in an active market, are carried at 

amortized cost. 

Investment in bonds is classified as non current assets except for 

the bonds that due in the next financial period will be classified 

as current assets. 

3-8 Inventories 

Inventories are stated at the lower of cost or net realizable value. 

Cost is determined as follows: 

- Raw materials, spare parts, supplies and packaging materials: 

at cost using the weighted average method. 

- Work in Progress and Finished goods Inventory – supplies direct 

cost and wages addition to indirect expenses according to 

Normal activate level. 

- Net excepted value to be determined based on the estimated 

sales price less additional expected cost it is built or sold. 

3-9 Accounts receivable 

Accounts receivable are stated at original invoice amount less a 

provision for any uncollectible amounts. An estimate for doubtful 

debts is made when collection of the full amount is no longer 

probable. Bad debts are written off when there is no possibility of 

recovery. 

3-10 Accounts payable and accruals 

Liabilities are recognised for amounts to be paid in the future for 

goods or services received, whether billed by the supplier or not. 

3-11 Cash and Cash Equivalents 

For the purpose of the cash flow statement, cash and cash 

equivalents consist of cash in hand, bank balances, and short-term 

deposits with an original maturity of three months or less, net of 

outstanding bank overdrafts if any.



3-12 Provisions 

Provisions are recognised when the Company has an obligation 

(legal or constructive) arising from a past event, and the costs to 

settle the obligation are both probable and able to be reliably 

measured. Provisions are evaluated in each balance sheet date 

and adjusted to provide the most reasonable estimate. 

3-13 Revenue recognition 

Revenue from sales is recognised when the significant risks and 

rewards of ownership have passed to the buyer and the amount 

of revenue can be measured reliably. 

The revenue from prepaid service recorded when estimated the 

result transaction from completion transaction percentage in 

Balance Sheet date. 

Revenue from share profit recorded when there is right to 

receive it. 

3-14 Legal reserve 

According to the Company’s article of association, 5% of the net 

profits of the year is to be transferred to the legal reserve until this 

reserve reaches 50 % of the issued capital. The reserve is used upon 

a decision from the general assembly meeting based on the 

proposal of the board of directors 

3-15 Impairment and uncollectability of financial assets 

The Company regularly assesses whether there is an indication 

that an asset could be impaired. If any such indication exists, the 

recoverable amount of the asset is compared with its carrying 

amount, and when the carrying amount of the asset exceeds its 

recoverable amount, the asset is considered impaired and is written 

down to its recoverable amount. 

A previously recognized impairment loss is reversed when there 

is a change in the recoverable amount of the asset to the extent 

of the previously recognized loss. 

3-16 Accounting estimates 

The preparation of financial statements in accordance with Egyptian 

Accounting Standards requires management to make estimates 

and assumptions that affect the reported amounts of assets, 

liabilities, revenues and expenses during the financial years. Actual 

results could differ from these estimates. 

3-17 Income tax 

Taxation is provided in accordance with Egyptian fiscal regulations. 

Deferred income tax is provided, using the liability method, on all 

temporary differences at the balance sheet date between the tax 

bases of assets and liabilities and their carrying amounts. 

Deferred income tax assets and liabilities are measured at the tax 

rates that are expected to apply to the period when the asset is 

realised or the liability is settled, based on laws that have been 

enacted at the balance sheet date. 



Deferred income tax assets are recognised for all deductible 

temporary differences and carry-forward of unused tax assets and 

unused tax losses to the extent that it is probable that taxable 

profit will be available against which the deductible temporary 

differences and the carry-forward of unused tax assets and unused 

tax losses can be utilised. 

3-18 Cash flow statement 

The cash flow statement is prepared using the indirect method, 

for the purpose of preparing the cash flow statements, the cash 

and cash equivalent include cash on hand , cash at bank , short 

term deposits , treasury bills with maturity date three months or 

less deducting the bank over draft – if any 

3-19 Related party transactions 

Related party transactions performed by the Company within its 

normal business transactions are recorded based on the conditions 

set by the board of directors. 

3-20 Borrowing 

Borrowings are initially recognized at the value of the consideration 

received. Amounts maturing within one year are classified as current 

liabilities, unless the Company has the right to postpone the 

settlement for a period exceeding twelve months after the balance 

sheet date, then the loan balance should be classified as long term 

liabilities 

3-21Borrowing costs 

Borrowing costs are recorded in the statement of income as 

financing expenses except the borrowing costs directly related to 

the acquisition, construction or production of a qualifying assets 

which is included as part of the cost of the asset. 

3-22 Expenses 

All expenses including operating expenses, general and 

administrative expenses and other expenses are recognized and 

charged to the statement of income in the financial year in which 

these expenses were incurred.



4- Property and Equipment - Net 

5- Projects Under Constructions 

31/12/2007 

LE 

Tahran building 15,315,724 

Computers and software 3,883,703 

Villa ( Al rehab ) 3,130,245 

Fixtures 2,373,015 

Al Nile hotel 259,875,322 

284,578,009 

6- Goodwill 

31/12/2007 

LE 

Arab Company for Projects and Urban Development 12,522,306,279 

Alexandria for Real Estate Investment 1,982,306,076 

San Stefano for Real Estate Investments 449,380,607 

Alexandria for Urban Projects 47,725,750 

Total Good Will 15,001,718,712 

104-105 



Buildings Motor Tools Furniture Marine Computers Total 

& Vehicles & Equipments & Equipment 

Constructions Fixtures 

LE LE LE LE LE LE LE 

Cost 

At 1 January 2007 1,220,698,732 34,502,987 13,359,977 318,249,704 4,799,199 5,150,612 1,596,761,211 

Additions 2,504,165 1,058,197,671 8,190,433 3,689,051 85,112,057 201,340 3,170,694 1,158,561,246 

Disposals (66,090) (1,301,460) - (379,660) - - (1,747,210) 

At 31 December 2007 2,278,830,313 41,391,960 17,049,028 402,982,101 5,000,539 8,321,306 2,753,575,247 

Accumulated depreciation 

At 1 January 2007 (50,428,842) (15,251,299) (2,905,045) (69,944,647) (537,911) (1,788,266) (140,856,010) 

Depreciation charge (21,618,379) (6,796,085) (1,360,050) (27,302,904) (606,769) (815,880) (58,500,067) 

Disposals 13,548 1,054,924 - 61,879 - - 1,130,351 

At 31 December 2007 (72,033,673) (20,992,460) (4,265,095) (97,185,672) (1,144,680) (2,604,146) (198,225,726) 

Net carrying amount 

At 31 December 2007 2,206,796,640 20,399,500 12,783,933 305,796,429 3,855,859 5,717,160 2,555,349,521 

7- Available for Sale Investments 

31/12/2007 

LE 

Current Investments 

Free Zone Industry Area East Port Saied 16,287 

Egyptian International Medical Insurance 250,000 

Egyptian Company for Marketing and Distribution 500,000 

Suez Cement 581,700 

Arab African Bank Bonds 623,222 

Alexandria for Mineral Oil 659,439 

Al Delta for Sugar 1,621,971 

Housing and Development Bank 1,903,043 

Sinaa Cement 2,451,865 

Canal Maritime agency 2,610,000 

Mobinil 2,868,180 

Misr El Gedida for Housing and Development 2,969,928 

CIB 3,074,295 

Faisal Islamic Bank 3,282,904 

Orascom Telecom 3,334,640 

Elnaeem for Holding Investments 4,489,189 

Orascom for Constructions 5,578,950 

Financial Group Hermes 6,860,880 

6 of October Company for Development and Investments 10,927,116 

El Tayseer for Real Estate Finance Company 

Non-Current Investments 

11,250,000 

Housing Development Bank Securities 57,930 

El Tameer for Real Estate Finance Company 6,650,000 

Other Investments 9,000,000 

Total 81,561,539 

Current Investments (65,853,609) 

Long Term Investments 15,707,930



8- Investments in Associates 

Shares 31/12/2007 

participation LE 

Arab Egyptian for entertainment projects 50% 125,000 

Alexandria for projects management 32.5% 1,027,000 

Nile Besfour Company 31.77% 10,028,072 

Alexandria for tourism projects 24.25% 477,678 

Areez arab limited company 50% 22,050,000 

33,707,750 

9- Trading Investments 

31/12/2007 

LE 

Investments fund 13,000,048 

Huros investments fund 16,950,000 

Themar investments fund 674,553,037 

Export development bank investment fund 49,999,932 

Dune grosses overseas 80,094,663 

Antalis business corp 75,000,000 

Egyptians cables investments company 16,633 

909,614,313 

11- Work in Progress 

10- Notes Receivables 


31/12/2007 

LE 

Notes Receivable 1,528,943,355 7,832,032,472 9,360,975,827 

Accounts Receivable 201,663,516 - 201,663,516 

1,730,606,871 7,832,032,472 9,562,639,343 

Project Land Consultations Consultations Consultations Technical Financing Licenses Indirect Current Non Current Total 

and designs work of Managenent costs and other costs portion portion 

Alexandria and governments 

governorate Supervision fees 

costs 

LE LE LE LE LE LE LE LE LE LE LE 

Arab for projects and 2,164,282,270 171,500,090 1,211,189,577 - 30,527,533 - 75,719,378 1,129,698,835 79,482,687 4,703,434,996 4,782,917,683 

urban development 

San Stefano For Real 139,430,939 88,506,440 916,277,154 5,506,726 - 261,565,870 2,785,862 185,211,848 1,599,284,840 - 1,599,284,839 


Alexandria For Real 584,197,060 124,051,241 1,286,627,403 - - 186,835,493 - 169,688,285 2,300,430,742 50,968,739 2,351,399,482 


2,887,910,269 384,057,771 3,414,094,134 5,506,726 30,527,533 448,401,363 78,505,240 1,484,598,968 3,979,198,269 4,754,403,735 8,733,602,004 

12- Finished Units: 

The balance of finished units is LE 12,382,134, represents the value 

of finished units returned from clients and available for sale. 

13- Inventory 

31/12/2007 

LE 

Equipment 37,462,140 

Furniture 8,053,890 

(Loss) Utilize the hotel Inventory (23,312,254) 

22,203,776 

14- Prepayment and other Debit Balances 



31/12/2007 

LE 

Contractors and Accounts Payable Down 

Payment and Storage 237,347,701 

Received from Abroad 10,609,524 

Transfers – Cheques 23,690,941 

Accrued Revenue 18,878,797 

Hotels Current Accounts 83,727,591 

Related Parties (Note No. (27)) 54,658,456 

Investment Debtors 31,557,822 

Diverse Debtors 255,911,977 

716,382,809



15- Cash and Cash Equivalents 

Local Foreign TOTAL 

currency currency 31/12/2007 

LE 

Time Deposits 810,862,599 200,632,862 1,011,495,461 

Banks Current Accounts 50,521,660 151,467 50,673,127 

Cash on Hand 10,058,382 - 10,058,382 

Treasury Bills 2,410,334,761 - 2,410,334,761 

Cheques under collection 7,425,446 - 7,425,446 

3,289,202,848 200,784,329 3,489,987,177 

For the purpose of preparing the statement of cash flows the cash 

and cash equivalents consists of: 

31/12/2007 

LE 

Cash on Hand and at Banks 3,489,987,177 

Banks Overdraft (51,836,987) 

3,438,150,190 

16- Provisions 

31/12/2007 

LE 

Beginning Balance 5,988,201 

Used during the year - 

Ending Balance 5,988,201 

17- Creditors and Short Term Notes Payable 

31/12/2007 

LE 

Contractors and Accounts Payable 210,956,744 

Related parties ( Note No.(27)) 17,528,531 

Notes Payables * 73,363,808 

301,849,083 

* The earned cheques were recorded after a year of the financial 

statements in the long term liabilities (Note No. (22)). 

18- Customers Down Payment 

31/12/2007 

LE 

Customers down payment ( Al Rehab Project ) 346,641,269 

Customers down payment ( Nile Plaza Project ) 118,905,307 

Customers down payment ( Sharm El Sheikh Project ) 4,719,942 

Customers down payment ( San Stefano Project ) 1,229,678,655 

Customers down payment ( Al Rabwa Project ) 339,512,989 

2,039,458,162 

106-107 

19- Other Credit Balances 



31/12/2007 

LE 

Dividend Payable 5,032,556 

Retentions Payable 157,394,623 

Accrued Salaries and Expenses 3,348,400 

New Urban Authority 4,726,851 

Subscription of the club 175,493,905 

Accrued Consultant Fees 16,343,983 

Club contribution for annual subscription renewal 16,678,071 

Other Creditors 488,851,138 

Treasury Stocks - Due to employees 37,600,000 

Hotels Current Account – Renewal and Replacement 12,646,487 

Units Insurance 150,655,022 

1,068,771,036 

20 – Share Capital 

The company’s authorized capital amounted to LE 50,000,000 and 

the issued capital amounted to LE 6,000,000 divided over 600,000 

share of LE 10 par value each. 


6 October 2007, the company’s authorized capital was amended 

to be LE 30,000,000,000 and the issued and paid up capital was 

amended to be LE 18,152,035,500 divided over 1,815,203,550 share 

of LE 10 par value each through share swap with the subsidiaries 

companies. 


28 October 2007, the company’s issued and paid up capital was 

increased to be LE 20,302,035,500 divided over 2,030,203,550 shares. 

The increase was paid and amounted to LE 2,150,000,000 and the 

premium share amounted to LE 1.6 per share by total amount LE 

344,000,000 

- Premium Share 

Premium share amounted to LE 1.6 per share by total amount LE 

344,000,000 and an amount of LE 185,880,702 was used to cover 

the IPO expenses and the net balance of the share premium is LE 

158,119,298 

21- Loans and Facilities 

The balance on date of the financial statements is LE 2,064,041,037 

which consists of: 


31/12/2007 

Facilities 98,625,259 35,600,000 134,225,259 

Loans * 258,490,415 1,671,325,363 1,929,815,778 

* The instalments due within the following year is recorded in the 

current liabilities and the loans are granted with commercial papers 

and financial securities 

LE 

357,115,674 1,706,925,363 2,064,041,037



22- Long Term Liabilities 

31/12/2007 

LE 

Long Term Notes Payable 18,977,755 

18,977,755 

Customer down payment ( Madinaty Project ) 8,264,992,594 

Customer down payment ( Al Rehab Project ) 1,700,877,729 

Customer down payment 1,238,086,236 

( Al Rehab Extension Project ) 

Urban Authority 2,132,849,604 

13,336,806,163 

13,355,783,918 

23- Sales and Cost of Sales 

31/12/2007 

LE 

- Revenue from Sold Units 332,569,212 

- Net Revenue from Hotel Operation 57,465,428 

- Services Revenues 41,378,498 

431,413,138 

- Operation Cost 

- Cost of Sold Units 150,749,233 

- Cost of Sold Services 24,697,387 

175,446,620 

24- Earnings Per Share 

Earnings per share are LE .66 according to the following: 

25-Resreves 

31/12/2007 

LE 

Earnings: 

Net profit for the year attributable to equity 195,395,347 

holders of the Parent 

Shares: 

Weighted average number of shares 320,750,592 

outstanding for calculating EPS 

Earnings per share 0.61 

- General Reserve 


6 October 2007, the different results from shares swap of the 

company with the subsidiaries which amounted to LE 25,747,613 

were transferred to the general reserve. 

26-Deferred Tax Liability 

Deferred Tax Liability as of 31 December 2007 amounted to LE 

3,333,579 represents the deferred taxes of the fixed assets and 

related to difference between tax depreciation and accounting 

depreciation as follows: 

31/12/2007 

LE 

Fixed assets 3,333,579 

3,333,579 

27- Related Party Transactions 

It delegates some assignments in El Rehab City’s project to them. 



It may as well pay off or settle some balances on behalf of them. 

These transactions balances appeared in the Assets and Liabilities 

in the Balance Sheet after the approval of the General Assembly 

of the Company. 

Alexandria Company for construction is the primary contractor for 

the companies' projects under the contracts signed by the 

companies. 

Al Basatin Company for Gardening and Landscaping performs the 

job of gardening and landscape for the Rehab project under the 

contract signed with the company. 

Prepayments Credit Transaction 

(debit ) balances type 

Alexandria for Constructions 53,649,352 16,764,035 Contractor 


Al-Basatin Company for 1,009,104 764,496 Contractor 

Gardening and Landscaping 

54,658,457 17,528,531 

28- Tax Situation 

The company is subject to Tax Law 91 for 2005, because the 

Company started it’s activity in April 2007, the tax returns not yet 

submitted. 

29-Financial Instruments and Risk Management 

The Company’s financial instruments are represented in financial 

assets and financial liabilities. The financial assets include cash on 

hand and at banks, account receivable, debtors and other debit 

balances. The financial liabilities include banks overdrafts, accounts 

payable, creditors and other credit balances. 

The significant accounting policies applied for the recognition and 

measurement of the above mentioned financial assets and liabilities 

and the related income and expenses 

Herein under the significant risk related to the financial instruments 

as well as the significant policies and procedures that applied by 

the company to reduce those risks. 

A- Credit Risk 

Credit risk represents the risk of default of the customers from not 

paying the amounts due, this risk is limited due to the expand 

number of customers that the company deals with and having 

sufficient guarantees to reduce the risk of default a customer , also 

follow up the customers through specific departments. 

B- Interest Rate Risk 

The company mitigates the impact of the interest rate changes 

on its operational results and the value of its financial assets and 

liabilities. 

C- Foreign Currency Risk 

The foreign currency risk is the risk that the value of the financial 

assets and liabilities and the related cash inflows, and out flows in 

foreign currencies will fluctuate due to changes in foreign currency 

exchange rates, this risk is limited as most of the company’s 

transactions are in local currency.

Notes

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